Gold tops $US5000 for first time in history, Australian dollar jumps

The gold price topped $US5000 ($7233) for the first time in history on Monday morning to extend a record-breaking year-long rally driven by worries over the shock policymaking of US President Donald Trump.

The precious metal, known as a safe-haven asset that investors buy in times of uncertainty, has now more than doubled in value since the November 5, 2024, election of the controversial US President.

In 2026 alone, gold has jumped 10 per cent on worries over the US President’s threats to impose 100 per cent tariffs on Canada, annex Greenland, and demand that any new US Federal Reserve chairman should be willing to lower interest rates to as low as 1 per cent in the world’s largest economy.

The upheaval also pushed silver to more than $US100/oz for the first time in history on Friday amid a broad rally in commodities.

“The surge in geopolitical risk on the back of threats to US Fed independence saw gold and silver pushed to more new record highs,” said AMP’s chief economist Dr Shane Oliver.

“While they are getting overbought and vulnerable to a correction the broad trend in both is likely to remain up as investors demand a hedge against geopolitical risks, worries that Trump will weaken the US Federal Reserve, risking higher inflation and associated downwards pressure on the $US dollar.”

The selling of the US dollar pushed the Australian dollar to a 16-month high versus the greenback to buy US69.3 cents on Monday morning.

Traders are also bidding the Australian dollar higher ahead of December quarter inflation data due on Wednesday, which may prompt the Reserve Bank into lifting interest rates 25 basis points when it meets on February 3.

The rally in gold prices has also sent dozens of miners on the Australian Securities Exchange to record highs, although the local bourse is closed on Monday for the Australia Day Holiday.