Gold price surges past US$5000 for first time as investors seek safe haven

The price of gold has hit a historic milestone as fearful investors continue to pile into the safe haven asset.

For the first time, the price of gold surpassed the historic US$5000 an ounce.

Gold started 2025 worth $US2600 an ounce, but investors have piled into the safe haven asset over the last 13-months sending the price more than 90 per cent higher.

The meteoric rise represents one of the most significant commodity rallies in recent memory, with traders scrambling to secure positions in the precious metal.

Helping to drive the price higher throughout the week was tensions between the US and Europe over Greenland which President Donald Trump says is vital for national security.

In a tit-for-tat exchange between the two large economies, Mr Trump threatened further tariffs starting at 10 per cent, while Europe warned it would fire the trade bazooka going beyond traditional tariffs on goods and restricting or taxing US services instead.

Global X ETFs investment strategist Justin Lin says while tensions between Europe and the US eased since President Trump’s speech at Davos, markets remain volatile.

“Gold’s resilience suggests investors continue to treat hedging as a necessity in the current environment,” he told NewsWire.

Mr Lin also pointed out gold continues to strengthen on the “sell America” trade and as a hedge against US currency debasement.

There was an unusual mix of a weakening US dollar and rising bond yields throughout the weeks trading.

“In a “tail-wagging-the-dog” dynamic, silver’s extreme momentum also appears to be spilling over into gold.

However, we see a more attractive risk-reward in gold, supported by structural central-bank demand and the current geopolitical backdrop,” Mr Lin said.

Mr Trump has repeatedly called out US Federal Reserve chair Jerome Powell over interest rates, which in the view of the President should be significantly lower than the 3.50 to 3.75 per cent target range.

“While they are getting overbought and vulnerable to a correction the broad trend in both is likely to remain up as investors demand a hedge against geopolitical risks, worries that Trump will weaken the Fed risking higher inflation and associated downwards pressure on the $US,” AMP chief economist and head of investment strategy Shane Oliver wrote.

The surge has prompted speculation about whether gold can maintain its momentum or if the price could temporarily dip.