AA Edit | Gold Soars On Dollar Doubts

As India was busy celebrating its 77th Republic Day on January 26, gold prices blasted through the once-unimaginable milestone of $5,100 an ounce — a level that beats even the inflation-adjusted highs in the past. Similarly, silver surpassed $100 an ounce for the first time. Though bullion markets were closed in India for the Republic Day, 10 grams of gold in rupee terms is priced Rs 1,64,837 and one kg silver is Rs 3,53,721.

The yellow metal soared 64 per cent in 2025, its biggest annual gain since 1979, driven by safe-haven demand, US monetary policy easing, robust central bank purchases, including China’s 14th straight month of gold buying in December, and record inflows into exchange-traded funds.

The latest spike in the prices of precious metals could be attributed to US President Donald Trump’s threat to impose 100 per cent on Canada, if its northern neighbour makes a trade deal with China. Days ago in Davos, Canada Prime Minister Mark Carney announced the end of the old world order and called on middle powers to join hands for survival.

Similarly, Trump threatened to slap a 200 per cent tariff on French wine after French President Emmanuel Macron criticised Trump’s demand for Denmark to forego its claim on Greenland and threatened counter-measures and retaliatory tariffs against the United States. Both the incidents show rifts in two key alliances — North American Free Trade Agreement (Nafta) and Trans-Atlantic security alliance Nato.

The ramifications of these ruptures could be seen far beyond geopolitics. Countries and investors have lost faith in fiat currencies, especially the US dollar, and conventional assets like equities and sovereign bonds. On the other hand, gold and silver are skyrocketing to stratospheric levels, with analysts predicting the yellow metal would cross $6,000 this year in continuation of extended financial uncertainty in the world.