Gold’s dazzling new peak of $5,000-plus demands clarity on the financial world’s insecurity

Subscribe to enjoy similar stories. The price of gold has scaled yet another historic peak, leaping above the mark of $5,000 per ounce to reach $5,100 on Monday. About a year ago, it was at $2,770, but experts now expect the yellow metal to go past $6,000 by the end of 2026.

This surge can safely be pinned on the safe-haven effect of US President Donald Trump’s erratic policies, which have eroded confidence in both the dollar’s stability and its ability to retain its post-World War II crown as the anchor currency of global finance. However, there is such a thing as too much of a good thing, and once the real world becomes less volatile, some investors who fled regular assets like stocks and bonds could return, which could see the price of gold descend from these heights. In other words, gold is not a buy-and-forget-it store of value, despite its dizzying rise over the past year.

Gold was once the bedrock of global finance. Under the Bretton Woods system adopted in 1944, countries agreed to run currencies that were convertible into the US dollar and the US agreed to convert dollars presented by foreign governments and central banks into gold at a rate of $35 per ounce. This gave stability to exchange rates, but also gave the US a unique opportunity to run its mint to create money accepted around the world.

An oversupply of dollars abroad, particularly in Europe, eventually forced the US to abandon its promise to convert dollars into gold. This was in the early 1970s. After that, most currencies began to float on global demand and supply, while some sought to peg theirs to the dollar.