Investors around the world are losing faith in traditional safe-haven assets like the U.S. dollar and Treasuries, fueling a fierce rally in gold.
Why it matters: Gold prices have rallied over 17% so far this year as investors hedge exposure to Washington.
What they're saying: "Investment dollars flowing into gold are largely a function of the risk associated with unpredictable policy in the American political authority," Joe Brusuelas, chief economist at RSM U.S., tells Axios.
- Gold is acting as insurance against "policy fragmentation," says Paul Karger, CEO of TwinFocus, a wealth advisory firm.
Zoom in: Global investors are "calling bunk on currencies," Karger adds.
- Central banks globally are still buying U.S. Treasuries, which requires dollar exposure, but the pace of those purchases has slowed.
- As of October, central banks owned more gold than U.S. Treasuries for the first time in 30 years. This has continued into 2026.
Between the lines: Countries that used to keep their cash in the dollar or Treasuries are looking for new stores of capital to diversify away from the U.S.
- Enter, gold.
Zoom out: The gold rally isn't just about central banks diversifying away from the policy decisions of the Trump administration, says Hakan Kaya, a senior portfolio manager at Neuberger Berman.
- Demand for metals broadly is spiking: Data centers that use metals are booming, which is why silver is also rallying.
- Geopolitical risks are increasing. One analyst says the biggest risk to gold is if risk itself ebbs.
Yes, but: Can the gold rally really keep going at this rate?
- Yes, says Russ Koesterich, portfolio manager for the BlackRock Global Allocation Fund.
- "Unlike other assets — we can't say [gold] is overvalued. The value of gold is always what people are willing to pay," he said in an interview with Bloomberg Television.
What we're watching: Whether anyone in the administration starts to take the rally in gold personally.
The bottom line: Gold's rally reflects a new kind of appetite for safety, driven by uncertainty from Washington.
- The durability of that trend depends on whether that uncertainty persists.
