TEMPO.CO, Jakarta - The price of gold continues to reach new heights. On Monday, January 26, the metal broke through the milestone of $5,000 (€4,217) per troy ounce (31.1 grams) for the first time — a further sign that investors are flocking to what's generally perceived to be a safe-haven asset amid rising geopolitical tensions.
Gold has been on a remarkable surge for the past 12 months, having almost doubled in value since this time last year.
It is on its biggest rally since the 1970s, and while the run has accelerated over the past year, its gains have been notable since 2019, when it was valued at just over $1,280 per troy ounce.
Why Is Gold Increasing in Value So Rapidly?
The idea of gold being a safe and secure investment during times of uncertainty goes back many decades. Such uncertainty is clearly a driver in the current rally.
US President Donald Trump's recent threats to invade and annex Greenland and to level tariffs against those who opposed his proposals on the issue have caused significant stress to the US-EU relationship.
The Greenland threats came shortly after the US intervention in Venezuela, which saw former president Nicolas Maduro captured by US special forces and removed from office.
When gold was on its run in 2025, geopolitical concerns over the wars in Ukraine and Gaza were a factor. There were also economic concerns, with doubts over Trump's trade tariffs, US government debt levels and the future status of the US dollar as the world's preferred reserve currency.
Dan Coatsworth, head of markets at AJ Bell, told DW that gold's continuing rise was a sign that "investors were reluctant to let go of their safety blanket, just in case Donald Trump woke up with another controversial idea."
In a note to clients, analyst Thomas Kulp from the Frankfurt-based DZ Bank wrote "the search for a safe haven is the strongest price driver in the gold market," citing the US attack on Venezuela, the suppression of mass protests in Iran, and the Greenland dispute.
Kulp sees a "deterioration in global geopolitical conditions" which generally leads both private and institutional investors to "increase the gold allocation in their portfolio."
DZ Bank now expects the gold price trend to continue in 2026.
Rising Doubts About US Dollar’s Reserve Currency Status
Last week was gold's best in nearly 20 years in terms of price increases, while the US dollar had its worst week since May 2025. That underlines the connection between the price of gold and the value of the dollar.
Therefore, Fawad Razaqzada, market analyst at foreign exchange online broker Forex.com thinks that gold's price action over the past few weeks has been "textbook safe-haven behaviour."
"Underlying demand for protection is still there. Confidence in the dollar and bonds look a bit shaky," he wrote on the company's website.
Dollar weakness itself can increase purchases of gold and silver as it makes them cheaper to purchase in other currencies. Uncertainty over the dollar also typically leads to further investment in gold, as the metal is often seen as an alternative option to the dollar.
In 2025, the US dollar had its steepest annual fall since 2017, declining by 9.5% against a basket of other major currencies.
Many analysts expect the trend to continue in 2026 amid uncertainty over the US economy, investor diversification away from US assets and the possibility of further interest rate cuts from the US Federal Reserve.
Another safe-haven currency, the Japanese yen, has also been losing its luster in many investors' eyes, sliding amid worries over Japan's fiscal position. There is speculation that Japanese authorities could step in to prop up the currency — a market intervention that could put the US dollar under further pressure and help push gold up furether.
New Investors in the Gold Market
However, experts also say gold's current surge is tied to new investors entering the market for the metal. Several analysts say there has been a rise in demand for gold-backed exchange traded funds (ETFs), with more and more investors from a wider range of backgrounds seeking to invest.
"The fact that ETF demand has re-entered the scene so forcefully means that there are two forms of 'aggressor' bids for gold — from central banks and ETF investors," wrote Deutsche Bank analysts in a note to clients late last year.
Gold has long been purchased by central banks around the world but the new ETF demand has helped fuel the current rally. The World Gold Council, an international trade association for the gold industry, confirmed in late December 2025 that global gold ETF assets under management (AUM) doubled to an all-time high of $559 billion last year.
The Council attributed the rise to rising safe-haven demand and so-called "momentum buying" — when investors buy due to the surging price attracting attention, and weakness in the US dollar.
2026 Outlook
In the final months of 2025, most analysts saw gold continuing its record run in 2026 and so far, they are being proven right.
The World Gold Council argues the 2026 outlook remains shaped by geopolitical uncertainty and says multiple outcomes remain possible. If economic growth slows and interest rates fall further, gold could see moderate gains, the organization says in its Gold Outlook 2026 report. However, amid a more severe downturn and rising geopolitical uncertainty could see greater gains.
It cautions though that a successful outcome from Trump policies could "accelerate economic growth and reduce geopolitical risk, leading to higher rates and a stronger US dollar, which would push gold lower."
Read: Gold Prices Predicted to Hit Rp3 Million per Gram by Next Weekend
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