Gold is shining – and not just because of tariff uncertainty (Image: TallyMoney/Getty)
It’s easy to point to tariffs as the only reason gold has pushed back above $5,000 per ounce. Trade tensions are rising, costs are increasing, and uncertainty is back in focus. That alone is enough to drive investors toward safe-haven assets. But tariffs are only part of the story of why gold is steadily heading back to record highs.
Gold briefly surged above $5,500 at the end of January before dropping briefly below $4,700 in early February. The fall grabbed attention and led to the usual financial commentators saying, “I told you gold would turn”. But the recovery has been just as telling. Zoom out, and the bigger picture becomes clear. A year ago, gold was trading below $3,000 per ounce. Even after recent choppy waters, it remains dramatically higher than it was 12 months ago. So why does gold continue to perform strongly?
Read more: UK retail sales hit 20-month high with ‘unprecedented’ surge in jewellery demand
Read more: Gordon Brown’s gold blunder cost Britain £48billion as price hits record high
First, inflation remains a reality. Even though the headline inflation measure has cooled to 3% in the UK, people notice their cost of living is still significantly higher than it was a few years ago. When people feel their money buys less, they look for assets that historically hold value over time. Gold has long been seen as protection against the erosion of purchasing power.
Second, global debt levels are at record highs, and investors are worried about some countries’ ability to manage it. Governments have borrowed heavily in recent years, and there is little sign of that trend reversing. When debt levels rise, confidence in the long-term strength of currencies can weaken. Gold, which is a tangible finite asset and not tied to any government’s monetary policy, benefits from that uncertainty.
Third, central banks themselves are buying gold. Over the past few years, many have been increasing their gold reserves as a way of diversifying away from heavy reliance on the US dollar, a trend known as ‘de-dollarisation’. When central banks are accumulating gold, it adds structural support to prices.
Interest rates also play a role. When rates are high, interest on cash savings at a bank can look attractive. But as markets begin to expect rate cuts, particularly if economic growth slows, gold’s performance becomes a more appealing alternative. Simply put, lower interest rates make holding gold more competitive than holding cash in savings accounts.
Geopolitical tensions are another factor. The US Supreme Court’s decision to strike down Donald Trump’s tariff policy last week has unsettled the markets. This and ongoing conflicts, such as between Iran and the US, shifting global alliances and political uncertainty all create a backdrop where investors prioritise stability over risk.
We’ve seen this shift in sentiment firsthand. Over the past year, we’ve seen customer accounts double and deposits triple at TallyMoney, as more and more people seek alternatives to holding all their savings in traditional currency. There’s a growing awareness that diversification now includes considering assets outside the conventional financial ‘fiat’ system.
The brief dip in gold’s value in early February did not change the underlying structural issues gold addresses. If anything, the rebound shows that ongoing strong demand remains.
All in all, gold’s strength is not based on one headline or one policy decision. It reflects structural shortcomings and people’s concerns about inflation, debt, global instability and long-term currency value.
Tariffs may be the latest thing to spark another rise, but the foundation for gold’s performance runs much deeper. In 2026, gold is not simply reacting; it is establishing its mainstream credentials in a world where economic uncertainty is the norm and Government-led monetary systems feel increasingly fragile.
And in times like these, gold shines a bright light.