Gold Prices Surge Amid Global Uncertainty and Weaker Dollar

Gold has long been considered a safe-haven asset during times of global uncertainty. When investors lose confidence in other assets, they often turn to gold as a way to diversify their portfolios and reduce risk. One key factor driving this demand is the lack of corporate or sovereign credit risk associated with gold.

In 2025, central banks bought 863 tonnes of gold, supporting long-term demand. This was despite a decline in gold prices during the first half of 2026, when it fell below $4,000 per ounce. However, by late August 2026, spot gold had reached $4,626.79 per ounce, with many experts attributing this rise to the safe-haven effect.

The World Gold Council reported more than 12 all-time highs in the first part of 2026, and a 100-point monthly rise in its Geopolitical Risk Index has historically matched about a 2.5% rise in gold prices. This long-term link between geopolitical stress and gold demand is clear.

Lower interest-rate expectations can also support gold, as it does not pay interest or dividends, unlike safer assets like Treasury bonds. A weaker US dollar can make gold cheaper for buyers holding other currencies, further increasing demand.