ECONOMYNEXT – Gold prices have surged above 5,000 US dollars an ounce Monday, amid speculative demand fired by uncertainty over erratic US policy reports said, and Federal Reserve and European Central Banks running abundant reserve regimes.
“The recent further leg up in gold and silver prices has arrived on the back of geoeconomics issues related to Greenland,” CNBC, a US -business news channel quoted HSBC as saying in note to investors.
Silver also rallied with prices 3 percent to 106.1 per ounce.
Gold prices have been rising steadily from around 2001 after the Federal Reserve kept rates low to ‘reflate’ the US under pressure from inflationists.
After the housing bubble the so-called quantitative easing and abandoning monetary policy normalization and instead ‘normalized’ the abundant reserve regime.
Gold prices got another boost after money was printed during Covid, and have risen exceptionally fast after the election of President Donald Trump.
In the run up to 2008 and quantity easing, central banks were net sellers of gold.
After quantity easing undermined the US dollar, central bank and speculative or investment purchases accelerated.
In 2015 central banks bought 913 tonnes of gold, according World Gold Council data with China buying 708 tonnes.
In the first three quarter of 2025 central banks bought 342.1 tonnes, compared to 427.7 tonnes for the full year 2024.
Gold prices were only 284 dollars an ounce at the turn of the millennium when inflationists including Ben Bernanke and Joseph Stiglitiz started firing a deflation scare.
Stiglitz also called on the International Monetary Fund to print special drawing rights in 2001 (Lessons from the Global Slowdown – 2001).
Like Donald Trump, inflationists are pressuring Fed not to fight inflation.
RELATED : How Not to Fight Inflation – Stiglitz – 2023
Most of the recent demand have been driven by ‘investment’ or speculative demand.
When the Federal Reserve was set up, gold was only 20 dollars an ounce. After inventing the policy in the 1920s and firing the roaring 20s bubble, the Fed devalued to 35 dollars an ounce in a competitive devaluation, in 1935 as most countries went failed to maintain the gold standard due to the policy rate.
The Bretton Woods was set up at 35 dollars an ounce but the it collapsed as the rate cuts for ‘full employment’ policies led to its collapse as President Nixon closed the gold window. (Colombo/Jan26/2026)