The price of gold has surged beyond $4,000 per ounce for the first time ever, thanks in part to uncertainty bred by President Donald Trump’s policies and recent global instability.
The move to gold has been led by money managers, investors, and central banks around the world, driving the metal’s value up by more than 50 percent this year, The New York Times reports. In January, gold’s price was around $2,670 per ounce.
Gold has long been seen as a safe investment in tumultuous times, and this year it is on course to hit its highest price since 1979, when prices skyrocketed by more than 100 percent, due to high inflation and the depreciation of the U.S. dollar.
The dollar losing its value is a modern driver of the move toward gold as well. The Federal Reserve is expected to make further interest rate cuts that may further depreciate the dollar, and the U.S.’s continually growing debts and deficits have only degraded its spot as a trustworthy credit recipient. After a Moody’s downgrade earlier this year, the U.S. no longer has a top credit rating with any of the main credit rating agencies.
Citadel founder Ken Griffin told Bloomberg he considered the sudden rise in gold’s price “really concerning” and warned that investors largely see the precious metal as safer than the U.S. dollar.
“We’re seeing substantial asset inflation away from the dollar,” he told the outlet on Monday.
The dollar’s value has dropped by 10 percent this year to date and the current 2.9 percent inflation rate — well above the Federal Reserve’s target of 2 percent — has further reduced the dollar’s buying power.
General instability in the U.S. — worsened by civil crises such as Trump’s threats of military invasions of American cities and a potentially lengthy government shutdown — has helped to fuel an overall lack of faith in U.S. institutions.
Peter Grant, vice president and senior metals strategist at Zaner Metals, told The Guardian that the move toward gold was “stemming in part from the government shutdown and no real indication that it is likely to be resolved in the immediate term here.”
Retail investors have also moved toward gold as a safer hedge against inflation as Trump’s stiff tariffs take effect around the world.
But it’s not just American turmoil causing investors to search for more stable investments.
The Japanese yen, which also typically serves as an investor safe haven, dropped to a seven month low on Monday after Sanae Takaichi, a leader of the Liberal Democratic Party, was elected to become the nation’s next prime minister.
Takaichi has promised to boost the Japanese economy through aggressive spending and has previously railed against the Bank of Japan’s interest rate hikes, according to Reuters.
“There’s going to be a period of time where [investors] try and figure out how exactly her policies will affect the currency,” Lou Brien, a strategist at DRW Trading in Chicago, told the outlet.
Another international curveball hit the markets on Monday when French Prime Minister Sébastien Lecornu resigned less than a day after forming a cabinet. His resignation — making his administration the shortest-lived in French history — shocked France and the markets, and again sent investors looking for stability in gold rather than investing in the already fragile euro.
Amid the global chaos on Monday, Goldman Sachs raised its 2026 gold price forecast to $4,900 per ounce, up from $4,300 per ounce, citing strong ETF inflows and likely continued investment from central banks heading into next year.
