Last year’s extraordinary run in precious metals has only intensified in 2026, as Donald Trump has continued to rip up the rules of the global economy.
Gold has been on a tear since last summer, repeatedly breaking records. It has risen by more than a quarter this month and hit a new high of just under $5,595 (£4,060) an ounce on Thursday.
It dropped sharply later in the day to $5,250 (£3,810) as speculation swirled about possible US action in Iran, but that remains almost double the price as when Donald Trump’s second term in the White House began a year ago.
Silver, meanwhile, was trading below $30 (£22) an ounce when the president prepared to announce his “liberation day” tariffs last April, but has since almost quadrupled in price, to more than $118 (£86) an ounce, with the most rapid run-up coming in the past month.
Giuseppe Sersale, a strategist at Italy’s Anthilia, said the market had “all the hallmarks of a mania”, describing recent price moves as “parabolic”.
So what’s driving the rush?
Gold has always been the ultimate “safe haven” asset, acting as a store of value in the face of inflation risks or broader economic and geopolitical uncertainty, all of which Trump has provided in spades.
The administration’s aggressive policies – including punitive tariffs on trading partners, threats to annex or bomb other countries such as Greenland and Iran and increasing pressure on the Federal Reserve to make it cut interest rates, including launching a criminal case against the central bank’s chair, Jerome Powell – have sent investors scurrying for the precious metal.
Trump resumed his onslaught on Powell after the Fed’s latest decision to hold rates on Wednesday, posting on social media: “Even this moron admits that inflation is no longer a problem.” However, analysts warn tampering with the Fed’s independence risks further stoking price rises.
Daniela Hathorn, a senior market analyst at Capital.com, summed the situation up: “Gold and silver are reflecting more than short-term market stress; they are signalling a re-pricing of trust. Trust in currencies, in institutions, and in the stability of the post-cold war economic order.”
The idea here is that even if US inflation were to get out of control, undermining the value of the dollar (an idea known as “debasement”), gold would hold its value. However, the same argument applies to cryptocurrencies such as bitcoin, which have not been subject to the same buying spree as precious metals.
What else is going on?
As the World Gold Council (WGC) pointed out in its quarterly data release this week, another driver has been central banks adding to their reserves. This trend appears to represent a modest diversification away from the standard reserve asset of treasuries, as US government bonds are known, as Trump’s chaotic approach raises anxiety about the idea of holding billions of dollars in IOUs from Washington.
However, WGC’s analysis also showed that while “central bank buying remained a prominent and additive factor” to global demand, such purchases were actually 21% lower in 2025 than a year earlier, at 863 tonnes.
Instead, as in many booms and bubbles, a significant part of the recent uptick appears to represent retail investors – either buying into the “safe haven” trade amid catastrophic headlines or just seeing the price spike and piling in.
Louise Street, a senior market analyst at WGC, said that last year “consumers and investors alike bought and held gold in an environment where economic and geopolitical risks have become the new normal”, adding: “Investment demand stole the show as investors raced to access gold through all available routes.”
In the UK, the Royal Mint website urges retail consumers to “take the first step towards fortifying your financial future with the timeless allure of gold”.
The silver price appears to have been caught up in the same speculative frenzy as gold in recent weeks – perhaps because its lower price makes it more approachable as an asset class.
What about the dollar?
Concerns about Fed independence and the broader stability of US policymaking are not just fuelling precious metals, but also seem to have been putting downward pressure on the dollar, which has been on the slide in the past week or so.
The euro broke through $1.20 (£0.90) on Tuesday before falling back modestly, while £1 was worth $1.38 on Thursday, up almost five cents in a fortnight. As Eszter Gárgyán of UniCredit put it in a research note: “The dollar has come under renewed depreciation pressure since mid-January, as geopolitical risks, rising trade tensions and concerns regarding Fed independence have resurfaced.”
The Trump administration has sometimes seemed conflicted about whether it wants to see a weaker dollar – to aid the president’s endeavour of narrowing the trade deficit – or a stronger currency, as a symbol of economic power. The greenback fell to a four-year low against a basket of other currencies on Wednesday, after the president shrugged off the currency’s weakness, saying: “No, I think it’s great.”
But his Treasury secretary, Scott Bessent, asked later about rumours there could be coordinated central bank action to prop up the wobbling Japanese yen, insisted: “We don’t comment, other than to say we have a strong dollar policy.”
Rapid market moves in Japan, with government bond yields up sharply as investors bet on a spending splurge after the upcoming snap election, are complicating the picture.
If investors are cooling on the US, why haven’t share prices tanked?
Far from tanking, US stocks have performed strongly over the past 12 months, driven disproportionately by the “magnificent seven” tech companies, whose revenues have been soaring on the back of the AI boom. Including dividends, the S&P 500 was up 17.9% in 2025.
While many analysts, and a fair few tech bosses, fret that current elevated share prices may be a bubble, investors appear to believe that, as Chuck Prince, then chief executive of ill-fated bank Citigroup put it back in 2007, “as long as the music is playing, you’ve got to get up and dance”.
And they are likely to have been buoyed up by hopes of fresh interest rate cuts in the coming months, if US inflation remains under control.
Similarly, unlike a year ago when there was a brief sell-off in treasuries, the “sell America” narrative does not seem to have extended to bond markets – yet.