Geopolitics and weak dollar ignite gold and silver prices

• Precious metal rally continues
• Gold breaks $5,000 barrier
• Silver price doubles in 2 months

Gold and silver prices surged to all-time highs on Monday as geopolitical worries and a weakening dollar spurred investors to buy safe-haven assets, extending a prolonged rally in the precious metals.

Gold topped $5,000 per ounce for the first time, peaking at $5,109 in early trade before easing slightly to be up 2 percent for the day. 

Having begun the decade at about $1,600, gold has more than tripled in price since early 2020 and has nearly doubled in the past year alone.

Silver has performed even better, soaring 5.5 percent to nearly $110 on Monday, having more than doubled in value in just two months. Silver is up sixfold in the 2020s.

“While gold remains the ultimate hedge against inflation, fiscal debt concerns and geopolitical risks, silver continues to be the main driver of the [precious metals] rally, fuelled by fear of missing out, strong momentum, limited liquidity and robust Chinese demand,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Vijay Valecha, chief investment officer at Century Financial in Dubai, attributed the latest gains in gold and silver in part to geopolitical tensions.

These include President Donald Trump’s renewed threats of military action against Iran and his vow to impose hefty US import tariffs on Canada should it sign a trade deal with China.

Gold and silver to a lesser extent are considered safe haven assets, so Trump’s latest outbursts have swelled demand for the precious metals.

The president’s erratic foreign policy – including his determination to seize control of Greenland – have also served to weaken the dollar, which slid to a four-and-a-half-year low versus the euro on Monday. 

The long-term rise in the gold price is part of a process of de-dollarisation, according to Philip Newman, director of Metals Focus, a precious metals consultancy in London. 

Trump’s “Liberation Day” tariff announcement last April shook confidence in the US currency and has served to accelerate the dollar sell-off, said Newman. 

“Everything you’ve seen since then has really deepened and reaffirmed investors’ caution about the dollar,” said Newman.

“That benefits gold and silver.”

He forecasts that gold’s peak price this year will be $5,500.

Gold’s share of countries’ international reserves is the highest in more than 30 years and the dollar’s share of global foreign currency reserves has declined this century, the United Nations estimates.

Dollar-denominated assets such as gold, silver and oil tend to be inversely correlated to the US currency. So, a falling dollar usually leads to the price of such assets rising.

US and European retail investors’ purchases of gold have increased markedly since it crossed the $4,000 price level last October. Central banks – which have been net buyers of gold since 2010 – are adding to their holdings, said Newman.

Investors bought 537 tonnes of gold in the third quarter of 2025, up 47 percent on the prior-year period, according to the World Gold Council. 

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Silver’s price surge shows little sign of slowing. Momentum will probably remain strong until the Chinese lunar new year holiday, Carsten Menke, a senior researcher at Julius Baer, wrote in a client note.

Chinese buyers have been instrumental in silver’s price rise, he said.

“Prices do not mirror the value of the metal anymore, but rather the willingness to pay for those who are hoarding and herding in the market,” Menke wrote.

“Considering the small size of the silver market, it does not need much money to move prices. We still see flows rather than fundamentals in the driving seat. There is increasing investor interest in silver across many emerging economies.”