Gold's fresh records and the market context
Gold pushed through another barrier on Monday, passing $5,000 an ounce for the first time in history and trading above $5,100 at its session peak. The rally has been dramatic: bullion has vaulted more than 80% over the past 12 months, and this year alone the price has risen by more than 18% so far. That follows a 64% spike in 2025 - the metal's largest annual advance since 1979.
Several factors are being cited as possible catalysts for the latest surge. Observers point to a weakening dollar, strains in the global geopolitical order, renewed trade frictions, concerns about the independence of central banks - and a longer-term inflation horizon. At the same time, sustained central bank buying and strong retail speculation have continued to bolster demand for precious metals.
Geopolitical and policy tensions
Geopolitical developments surrounding Greenland have been among the more visible flashpoints in recent days. A sequence of events that included an abrupt reversal by President Trump on military and trade threats against the Arctic island and its European partners followed a week of elevated tensions. Although the subsequent U-turn reduced immediate pressure, some NATO allies voiced concern that the episode could cause lasting damage to the alliance amid what they see as erratic, centralized decision-making in foreign policy.
Trade tensions have not subsided. The U.S. president renewed attacks on Canada over the weekend, threatening 100% tariffs over what was described as Prime Minister Mark Carney's pending trade agreement with China. Such threats have kept trade risk high on market watch lists.
Currency moves and intervention talk
The dollar weakened sharply against the Japanese yen, falling to two-month lows amid market talk about possible joint U.S.-Japan efforts to support the yen. That commentary followed reports that the New York Fed had queried dealers about dollar/yen rates - a step often seen as a precursor to intervention in FX markets. Market participants noted that any U.S. involvement would reinforce the perception that Washington is comfortable with a weaker dollar.
Domestic political strain and economic spillovers
At home, heightened political tensions have been compounded by violent incidents in Minneapolis, where the fatal shooting of another anti-ICE protester added to an already fraught domestic backdrop. Such events are taking place in a year that is politically significant for the administration, and recent disagreements in Congress have increased the risk of a partial government shutdown later this week. Senate Democratic leader Chuck Schumer said his party would vote against funding legislation that includes money for the Department of Homeland Security, a development with direct budgetary consequences.
Energy markets and weather-related disruption
Weather also remains a tangible near-term factor. Winter Storm Fern has battered large parts of North America, and the storm's impacts have been visible in energy markets. Oil prices edged higher on Monday as output disruptions persisted, following a gain of more than 2% in the previous session.
Market positioning ahead of the Fed and earnings
Other market moves this morning included steady U.S. equity prices and a decline in Treasury yields as investors awaited a Federal Reserve policy meeting on Wednesday. The Fed is widely expected to keep policy unchanged at that meeting. Market attention is also focused on a busy corporate earnings slate this week, including releases from Apple, Microsoft and Tesla, alongside a separate set of corporate reports scheduled for the day: Alexandria Real Estate Equities, Brown & Brown, Nucor, Steel Dynamics and W. R. Berkley.
Persistent investor flows into precious metal exchange-traded funds, robust central bank procurement, and heightened retail participation have contributed materially to the rally. Silver has mirrored gold's strength: it climbed above $100 for the first time on Friday, building on a 147% increase last year as retail flows, momentum buying and tightness in physical supply compounded market pressure.
What to watch next
Key data and events scheduled for the near term include U.S. manufacturers' new orders for November (release at 8:30 AM EST) and the Dallas Fed business survey for January (10:30 AM EST). The Federal Reserve meeting on Wednesday will be a focal point for market participants, alongside the stream of corporate earnings that could influence sentiment across sectors.
In sum, bullion's advance to record territory reflects a confluence of geopolitical strain, currency dynamics, central bank behaviour and strong retail and institutional flows. For now, gold and other precious metals remain positioned as prominent havens and hedges in investor portfolios, while broader market reactions continue to be shaped by the interplay of policy decisions, trade rhetoric, domestic political developments and weather-related disruptions.