Rising Political and Geopolitical Risks Push Gold to Historic Breakthrough Above $5,080 per Ounce

London | EcoPulse24

Gold prices continued their record-breaking rally at the start of trading on Monday, fueled by rising demand for safe-haven assets amid global economic and political uncertainty. The precious metal jumped nearly 2% to surpass $5,080 per ounce, extending its historic gains as risks intensified on multiple fronts.

The main support came from renewed concerns in the United States over a possible government shutdown, following Senate Democrats’ announcement of plans to block a key funding bill amid heightened domestic tensions after a shooting incident in Minneapolis. Simultaneously, trade policy developments increased anxiety, with Canadian Prime Minister Mark Carney confirming that Canada does not intend to pursue a free trade agreement with China, clarifying that the recent deal is limited to tariff reductions in specific sectors. This comes as US President Donald Trump threatened to impose 100% tariffs on Canadian goods if Ottawa proceeds with a broader agreement with Beijing.

On the geopolitical front, tensions between the US and Europe over Greenland, along with escalating strains between Washington and Tehran, have heightened caution in markets and further boosted demand for gold. Meanwhile, investors are closely watching this week’s Federal Reserve meeting, with widespread expectations that interest rates will remain unchanged.

After ending 2025 with strong performance, gold has posted gains of about 17% since the start of this year, reflecting a clear shift in investor preferences towards defensive assets.

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EcoPulse24 Analysis:
The price breakout above $5,080 does not reflect a single factor but rather an accumulation of risks: US political uncertainty, cross-continental trade tensions, and rising geopolitical threats. The Fed’s expected rate stability removes a traditional headwind for gold, while tariff threats and international disputes are rapidly repricing risk. Having achieved strong gains since the beginning of the year, gold’s near-term trajectory remains closely tied to the intensity of political headlines rather than traditional fundamentals, suggesting continued volatility with an upward bias as long as uncertainty persists.