What’s that old line from New York Yankees star Yogi Berra?

“It’s hard to predict, especially about the future.”

This year has certainly been a tough time for financial forecasters, with 2026 less than a month away.

Late last year, we were told that gold prices could rise to $5,000 ($7,222) an ounce by the end of the year.

Even after prices rose at a breakneck pace throughout 2025, this seemed like a brave move. However, that wall was breached within three weeks.

Silver has fallen even further, especially in recent weeks. Its price has quadrupled in the past year, leaving many concerned that a speculative bubble is forming in a commodity traditionally seen as a store of wealth and prized for its low volatility.

While the rise in gold prices is a surprise, the driving force behind it is not.

Investors are losing faith in the United States and its role as the standard-bearer of global capitalism.

“The world order is changing and trust is eroding,” said Ipek Ozkardeskaya, senior analyst at Swissquote.

“Recovery will take time.”

US President Donald Trump’s rambling meandering speech World Economic Forum held in Davos last weekIt marked a turning point, escalating the trade war and threatening to use military force against America’s NATO allies.

Even after the president withdrew his threat, the damage was done.

USD comes under pressure in Davos aftermath

The aftermath of the Davos meeting was devastating.

The US dollar has fallen more than 2% and the Australian dollar has soared, while interest rates in the US money market remain elevated due to capital outflows from the US.

The chaos has been in full swing since April 2nd last year. Trump announces ‘Liberation Day’ tariffsthe search for a new safe haven began almost a decade ago.

It was at this time that China began selling its holdings of U.S. Treasuries (essentially debt securities). It has long been considered the safest place to store your funds.

China’s huge trade surplus was mostly invested in US Treasuries, propelling China into the US World Bank.

But by 2017, as concerns about its relationship with the United States grew, it began diversifying its overseas holdings, focusing primarily on gold. Russia has also been piling on gold, and India has followed suit.

Central banks around the world then began diversifying away from US dollar-denominated debt and into gold. This created solid demand for precious metals, while prices remained relatively stable.

Once the 2024 U.S. election campaign got underway, prices began to trend higher as investment funds and, more recently, individual investors bought into gold.

Trump’s constant trade threats have further accelerated that trend. Arrest of Venezuelan President Nicolas Maduro And a deeply personal attack on Federal Reserve Chairman Jerome Powell spooked investors.

Its escalation to threats to forcibly seize NATO territory added a new dimension to uncertainty.

Debt and deficits make precious metals shine

Where will it all end?

That’s the problem with the current level of US government debt, $38 trillion.

Christopher Rooney, commodity strategist at RBC Capital Markets, expects prices to continue rising.

“Uncertainty and macro, particularly the weaker dollar, have provided a positive backdrop for gold since the beginning of the year, and in many ways, many of the main drivers for gold last year have been present in some form, especially with uncertainty,” he said.

“There are a number of factors to watch, including trade, politics, geopolitical instability, and concerns about Fed independence.

“Similarly, given the conversations in the first few weeks of this year, we don’t think investor or central bank demand will go away.”

The pursuit of safety has focused on hard assets. Paper, especially its promise to repay debt from increasingly cash-strapped borrowers like the United States and Japan, no longer has the same appeal to investors as it once did.

Demand for metals, especially those associated with the introduction of renewable energy such as copper and lithium, is very high.

And then there’s silver. Although they are widely used in industrial applications, especially in the energy sector, industrial demand alone cannot explain the soaring prices.

As a policy, “America First” appears to be having the opposite effect. Investors around the world have the United States well down on their priority list.

Trump promised Americans a new golden age. No one imagined it would work out like this.