Gold surges 7% toward $5,000 as investors flee to safety
Biggest daily gain since 2008 financial crisis signals mounting risk aversion in US markets
Gold prices surged nearly 7% on Tuesday, marking the precious metal's biggest daily gain since November 2008, as investors fled risk assets amid mounting economic uncertainty and escalating geopolitical tensions. The surge pushed gold futures to trade near the psychologically significant $5,000 per ounce level, closing the session at approximately $4,939.31 per troy ounce after jumping more than $320 in a single session, according to Trading Economics data.
The historic rally came as US stocks retreated, with the Dow Jones Industrial Average falling 330 points in afternoon trading. The sharp rotation from equities to traditional safe havens underscored growing investor anxiety about deteriorating market conditions.
Tuesday's move represented one of the most dramatic single-day advances in modern gold market history. Futures opened around $4,948 after closing near $4,653 the previous session, with trading volume crossing 200,000 contracts—indicating the move was driven by substantial institutional demand rather than speculative positioning, according to market analysis reported by The Economic Times.
The flight to safety reflects a confluence of factors weighing on investor confidence. "Investors are responding to falling real yields, persistent inflation uncertainty, and rising geopolitical risk," market analysts noted. Central banks have also accelerated gold purchases to historically elevated levels, tightening available supply and anchoring long-term demand for the precious metal.
Wall Street's outlook for gold has turned decidedly bullish in recent months. Major financial institutions have raised their year-end 2026 forecasts, with Goldman Sachs targeting $5,400 per ounce, J.P. Morgan projecting $6,300, and Deutsche Bank forecasting $6,000. These projections reflect concerns about sovereign debt sustainability, currency debasement risks, and the need for portfolio protection against systemic risks.
The precious metal's performance has decisively outperformed equities over the past two years, with gold gaining approximately 28% in 2024 and another 65% in 2025, according to Economic Times data. This trend has accelerated in early 2026 as volatility across risk assets has intensified.
Market observers note that gold's role in portfolios has evolved beyond a simple inflation hedge to serve as broader financial insurance. The metal's weak correlation with equities—particularly when stocks are concentrated in mega-cap technology companies—has made it increasingly attractive during periods of market stress.
Financial advisors now typically recommend allocating 5% to 10% of diversified portfolios to gold or gold-linked assets, with retirees often positioned at the upper end of that range. The surge in safe-haven demand suggests more institutional investors may be increasing those allocations as risk appetite diminishes.
The sharp move in gold comes alongside gains in other precious metals, with silver jumping more than 11%, platinum rising nearly 6%, and copper advancing over 4% in the same session, according to Economic Times reporting. This broader rally across commodities suggests a fundamental reassessment of risk is underway across asset classes.