Gold hit a new record high on Thursday at $5600 per ounce. Silver was trading at $120 per ounce. Suddenly, precious metal prices began to fall. By Friday evening, gold was already costing $470 per ounce.
Gold fever reached a new high at the beginning of 2026, with prices hitting a record earlier this week. All over the world, people queued up to sell bullion they already owned or to buy it.
Consumers went to local retailers to cash in their gold jewellery. Some are buying gold coins or bars for the first time. Others are investing in exchange-traded funds, trading the value of the metal in a way similar to trading shares.
On Wednesday, the price of gold on the spot market in New York reached a record high of more than $5418 per troy ounce, the standard by which precious metals are measured. Since then, prices have declined, with futures falling below $5,000 on Friday afternoon, which may signal a broader correction.
Fluctuations in value have also become more pronounced after news leaked that President Donald Trump would appoint former Federal Reserve official Kevin Warsh as US central bank governor.
Gold can be volatile and unpredictable. Nevertheless, prices are much higher than a year ago, when the spot price in New York was less than $2795 per troy ounce.
What is causing silver and gold prices to jump?
A lot comes down to uncertainty. Interest in buying gold – and other precious metals such as silver – is rising in turbulent times.
Gold prices spiked worldwide at the height of the COVID-19 pandemic and amid ongoing wars and turmoil caused by President Trump’s tariffs.
The latest records coincided with escalating geopolitical tensions in Venezuela and Iran, Trump’s repeated calls for a US takeover of Greenland and his increasingly aggressive stance towards America’s allies.
There has been “a real breakdown in the way we think about how the world order works, if we want to call it that,” Daniel McDowell, professor of political science at Syracuse University, told the Associated Press. He explains that in moments of instability, buying gold has historically been a kind of “psychological reaction” for some people seeking a safe place for their money.
The latest demand for gold and its recent decline in value have also coincided with the weakening of the US dollar and questions about the Fed’s future independence.
Trump has nominated former Fed official Kevin Warsh to run the central bank, which could signal a shift towards greater White House influence on monetary policy and also reduce the Fed’s historic independence from politics.
Warsh would replace current chairman Jerome Powell in May when his term expires. Trump selected Powell to head the Fed in 2017. He has consistently criticised himfor not cutting interest rates fast enough. Warsh has long been a ‘hawk’ in Fed jargon, someone who advocates higher interest rates to control inflation.
Trump has announced that he will nominate a new Fed chairman to lower interest rates, which he says will reduce the cost of borrowing for the federal government’s massive $38 trillion debt.
The nomination requires Senate confirmation.