Gold tops $5,000 for the first time in ‘breathtaking and profoundly scary’ rally
Gold (GC=F) rose above $5,000 an ounce on Sunday, reaching a major milestone earlier than Wall Street expected, raising questions about the breakneck pace of the precious metals’ rise.
Gold’s rise has become a hallmark of the so-called “adult trade” as investors buy assets to hedge against the erosion of purchasing power due to rising government debt around the world.
“The rise in precious metal prices is breathtaking and utterly frightening,” Brookings Institution Senior Fellow Robin Brooks wrote on Sunday, noting that the rise in gold prices is “part of something much bigger.”
“We are at the beginning of a global debt crisis in which markets increasingly fear that governments will try to inflate out-of-control debt,” Brooks wrote.
Brooks noted that the US dollar (DXY.NY-B) remained relatively stable in the second half of last year, but started the year on a downward trend.
“A falling dollar would over-intensify the gold price rise and depreciation trade because it would increase the purchasing power of non-dollar buyers,” Brooks wrote.
Goldman Sachs recently raised its year-end price target to $5,400 from $4,900, noting increased participation from private investors looking to diversify portfolios and preserve wealth.
“We view risks to our upgraded gold price forecasts as both sides, but are still significantly skewed to the upside as private sector investors may further diversify amid ongoing global policy uncertainty,” analysts said.
Bullion has soared on all major geopolitical events this year, including the U.S. capture of Venezuelan leader Nicolás Maduro and President Trump’s tariff threats against Greenland.
The precious metal is up 15% year-to-date, following a 65% increase in 2025.
Although demand for gold from foreign central banks has been strong due to reduced exposure to US Treasuries, Brooks of the Brookings Institution argued that this did not explain the huge rise in gold prices so far this year.
“The fact that this is a broad bubble across all precious metals suggests that central banks are the primary driving force,” Brooks wrote.
Precious metals (SI=F) rose above $100 for the first time on Friday and continued its rise on Sunday night, reaching over $107. Platinum (PL=F) has also reached new highs, gaining over 40% so far this year.
Copper (HC=F) rose to a record high above $13,000 per tonne in London on Friday.
Ines Ferre is Yahoo Finance’s senior business reporter. Follow him on X @ines_ferre.
For in-depth analysis of the latest stock market news and events driving stock prices, click here
Read the latest financial and business news from Yahoo Finance
