Amidst the worldwide uncertainty and tension created by the policies of US President Donald Trump, gold reached its highest level ever. The price of gold, considered a safe investment, crossed $5,000 for the first time on Sunday. Gold rose to $5,026 per ounce during trading. A day before this, on Friday, silver had also crossed $102 per ounce for the first time. Gold and silver prices have been increasing since Trump came to power for the second time.
In recent days, Trump's rhetoric regarding Greenland and pressure on the US central bank Federal Reserve have strengthened the price of gold. However, for the last two years, weak dollar, huge purchases by central banks and rising inflation are also continuously pushing gold prices higher. In January 2024, the price of gold was around $2,000 per ounce.
Apart from the ongoing wars in Ukraine and Gaza, America's interference in Venezuela has also become the reason for the increase in the price of gold. Forex.com market expert Fawad Razakzada says that in recent times the trend of gold has clearly been like a safe investment. He says that investors are still giving preference to safety, while confidence in dollar and bonds has weakened a bit.
Last week, Trump backed off from threatening to impose tariffs on several European countries. These countries were opposing America's plan to take control of mineral-rich Greenland. However, these statements of Trump increased the tension between America and Europe, due to which the trade war and uncertainty regarding American investment deepened again.
This also affected the dollar and it fell to its lowest level in four months against the euro, while gold prices rose further. Saxo UK investment strategist Neil Wilson said that as political tensions increased in the world, gold reached new record levels. He said that the markets had never taken the fear of US military intervention in Greenland seriously before, but now concerns about the trade war are increasing. Meanwhile, Danish Prime Minister Mette Frederiksen reached the capital of Greenland on Friday and talked to the leaders there.
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Investors are also keeping an eye on the Federal Reserve's policy meeting to be held this week. Recently, questions have been raised on the independence of the bank due to US prosecutors sending a legal notice to Fed Chairman Jerome Powell. Trump has criticized Powell several times in the past and has been raising questions on his statements regarding inflation.
Last week, the heads of many of the world's major central banks supported the Federal Reserve and Powell. Independent analyst Stephen Innes says that doubts about the independence of the central bank are gradually giving a strong base to gold prices. According to the latest report of the World Gold Council, in the third quarter of last year, the demand for gold increased by 44 percent in value terms on an annual basis to a record $146 billion. Investors have also invested heavily in the stock market through Gold ETFs. ETFs allow investors to invest money in gold like shares without buying it directly.
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