The price of gold rose above $5,000 an ounce for the first time, confirming estimates late last year of a rise of more than 60% in 2025.
The price of the yellow metal rose as tensions between the US and NATO over Greenland heightened concerns about financial and geopolitical uncertainty.
US President Donald Trump's trade policies have also worried markets. On Saturday, he threatened to impose a 100 percent tariff on Canada if it struck a trade deal with China.
Gold and other precious metals are considered so-called safe-haven assets that investors buy in times of uncertainty. Silver also topped $100 an ounce for the first time on Friday, consolidating its nearly 150% gain over the past year.
Demand for precious metals has also been driven by a number of other factors, including higher-than-usual inflation, a weak US dollar, purchases by central banks around the world and the fact that the US Federal Reserve may cut interest rates again this year.
The wars in Ukraine and Gaza have also contributed to the increase in the price of gold.
One of the greatest advantages of gold is its relative rarity. Only about 216,265 tons of this metal have been mined so far, according to the World Gold Council.
That's enough to fill three to four Olympic-sized swimming pools. Most of it was not mined until after 1950, as mining technology advanced and new deposits were discovered.
The US Geological Survey estimates that an additional 64,000 tons of gold can be mined from underground reserves, although the supply of the metal is expected to stagnate in the coming years.
“When you own gold, it's not tied to somebody else's debt like a bond or a stock is, where the performance of a company will determine the performance,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
“People go after gold”
Gold had a breakout year in 2025 with its biggest annual gain since 1979 as investors flocked to the precious metal.
Amid concerns such as Trump's tariffs and fears that AI stocks are overvalued, gold has repeatedly broken new records.
“I think a lot of this is due to the extreme uncertainty we have around US policy,” said Nikos Kavlis of research consultancy Metals Focus.
While economic concerns can help push up the price of gold, it also tends to rise when investors expect interest rates to drop.
Lower rates typically mean lower returns for investments like bonds, so investors turn to assets like gold and silver.
The US Federal Reserve is expected to cut interest rates twice this year.
“It is inversely related because the opportunity cost of keeping money in a [obligațiune guvernamentală] it's not worth it anymore, so people are moving to gold,” said Ahmad Assiri, research strategist at Pepperstone.
It's not just investors who buy gold.
Last year, central banks added hundreds of tons of bullion to their reserves, according to the World Gold Council.
Central banks from China, Poland and Azerbaijan were among the top buyers in 2025.
“There is a very clear shift away from the US dollar, which benefits gold immensely,” Kavalis said.
The start of this year has seen the price of gold rise, but Frappell warns that the “news-driven” market could also send the price of gold lower.
But not everyone buys gold for purely investment reasons.
In many cultures, metal is bought during festivals or given as gifts at celebrations such as weddings.
In India, the annual festival of Diwali is considered to be an auspicious occasion to buy precious metals to bring wealth and good luck.
According to US investment bank Morgan Stanley, Indian households held a staggering $3.8 trillion in gold, equivalent to 88.8% of the country's GDP.
Neighboring China is the world's largest consumer market for gold, with many believing its purchase will bring wealth and good luck.
“We often see a seasonal spike in demand around Chinese New Year, which we're seeing right around this time,” Kavalis said, referring to the upcoming Year of the Horse, which begins in February.
