Gold surged to $5,110 in late Asian trading, as investors sought refuge from intensifying geopolitical risks and fears of a partial U.S. government shutdown.
The continuation of the 2025 blistering precious metal rally, in gold and silver (which rallied above $100), is a signal of erosion of confidence in U.S. leadership and policymaking.
"This Trump administration has caused a permanent rupture in the way things are done, and so now everyone's kind of running to gold as the only alternative," Kyle Rodda, senior analyst at capital.com, said, according to Reuters.
Rodda argued that erratic decisions and aggressive rhetoric from U.S. President Donald Trump had unsettled allies and markets alike, prompting investors to reassess the safety of U.S. assets. Renewed trade threats, diplomatic tensions, and questions about the stability of long-standing international institutions just compounded the anxiety.
Central Banks Buy, Germany Ponders Repatriation
Central banks have been playing a crucial role in driving prices higher. Official-sector buying has remained robust as countries look to diversify away from the dollar.
According to World Gold Council data, Poland has been a top buyer, boosting its reserves by over 95 tons in 2025. That number is almost twice that of the second-largest buyer, Kazakhstan, which added 49 tons.
Surging prices elevated gold into political debates. A former Bundesbank official, Emanuel Mönch, warned about keeping one-third of reserves abroad.
"Given the current geopolitical situation, it seems risky to store so much gold in the U.S.," he said, according to the Guardian. "In the interest of greater strategic independence from the U.S., the Bundesbank would therefore be well advised to consider repatriating the gold," he added.
Michael Jäger, head of the European Taxpayers Association, pointed directly to Trump's behavior as a concern for Germany's 1,236 tons of gold stored in the U.S.
"Trump is unpredictable, and he does everything to generate revenue. That's why our gold is no longer safe in the Fed's vaults," he noted.
Renewed Government Shutdown Concerns
Investors are also bracing for fresh turmoil in Washington, as the U.S. government risks a partial shutdown by week's end. Funding for federal agencies is set to expire unless Congress approves a spending package.
While Republicans hold a 53-47 majority, the package needs 60 votes to pass – meaning it requires Democratic support.
Yet, Democrats are threatening to block the bill if it includes funding for the Department of Homeland Security (DHS) following recent fatal shootings involving immigration agents. With Republicans unwilling to strip out that funding, the risk of a shutdown has risen sharply.
Maine's first Independent senator, Angus King, warned that the standoff should not end up in a shutdown.
"Take up DHS by itself, let's have an honest negotiation, put some guardrails on what's going on, some accountability, and that would solve this problem," he said, according to CNBC. "We don't have to have a shutdown," he said.
Price Watch: SPDR Gold Shares (NYSE:GLD) is up 15.57% year-to-date.
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