Gold Surpasses $5,000 Mark Amidst Remarkable and Concerning Rally

On Sunday, gold (GC=F) crossed the $5,000-per-ounce threshold, achieving this significant milestone earlier than anticipated by Wall Street. This rapid ascent in precious metal prices has sparked discussions about the alarming pace of the rally. Investors are increasingly turning to gold as part of the 'debasement trade,' seeking refuge from diminishing purchasing power driven by mounting global government debt. Robin Brooks, a Senior Fellow at the Brookings Institution, described the surge in gold prices as 'breathtaking and profoundly scary,' emphasizing that it represents a much broader trend. 'We are at the outset of a global debt crisis, where markets are becoming increasingly apprehensive that governments will seek to inflate away their unsustainable debt burdens,' he noted. Brooks highlighted that despite the US dollar (DXY.NY-B) maintaining relative stability throughout the latter half of last year, it has begun to decline this year. 'A weakening dollar is likely to exacerbate the increase in gold prices and the debasement trade by enhancing the purchasing power of non-dollar investors,' he added. Goldman Sachs has recently adjusted its year-end gold price forecast from $4,900 to $5,400, noting heightened interest from individual investors aiming to diversify their portfolios and safeguard their wealth. 'We perceive that the risks to our revised gold price estimate are two-sided but lean towards significant upward potential as private investors might further diversify in response to ongoing global policy uncertainties,' analysts stated. Gold has demonstrated resilience by climbing at every significant geopolitical milestone this year, including the US's capture of Venezuelan leader Nicolás Maduro and President Trump’s tariff threats regarding Greenland. Year-to-date, gold has rallied by 15%, following a 65% increase in 2025. Illustrative gold bars reflect the recent fluctuations in gold prices, driven by inflation concerns and central bank policy perspectives in Brussels on December 23, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images) · NurPhoto via Getty Images While foreign central bank demand for gold has remained strong amid reduced exposure to US Treasuries, Brooks at the Brookings Institution argues that this demand does not fully account for the substantial increase in gold prices this year. 'The broad bubble encompassing all precious metals challenges the notion that central banks are the primary influence,' he stated. Additionally, in other precious metals, silver (SI=F) surpassed $100 for the first time on Friday, following up on Sunday night by hovering above $107, while platinum (PL=F) also reached new highs, gaining over 40% this year. Furthermore, copper (HC=F) on Friday set a record high above $13,000 per ton in London. Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre for more insights. For comprehensive analysis of the latest stock market developments and events influencing stock prices, visit Yahoo Finance.