The price of gold has surged to $5,300 per ounce overnight, fueled by a weakening US dollar and growing geopolitical tensions.

The US dollar has plummeted to its lowest value in nearly four years following President Donald Trump’s recent remarks expressing indifference towards the currency’s value.

Further unsettling financial markets, Trump announced a significant military maneuver by deploying a large naval fleet towards Iran. This move comes with a stern warning of potential military action unless a nuclear agreement is reached with the Middle Eastern nation.

In contrast, the Australian dollar has climbed to its highest value against the US dollar since February 2023, reaching 70.11 US cents after a 1.4 percent increase yesterday.

However, economists remain cautious about whether this upward trend against the US dollar will persist throughout the year.

According to a Commonwealth Bank of Australia investor update released today, a “significant shift” in economic fundamentals, such as Australian stock values and commodity prices, would be necessary for the dollar to reach 75 US cents.

A Commonwealth Bank of Australia investor update today says it would take a “significant shift” in economic fundamentals, such as the value of Aussie shares and commodity prices, for the dollar to achieve 75 US cents.

Instead, the bank expects the currency to trade at 70 cents against the greenback for some time.

“We expect AUD/USD to decline as 2026 progresses.”

So it may be better to book that trip to the US sooner, rather than later.

Gold ‘could hit US$6000’

The surge in gold prices and falling US dollar mark a flight from currencies and sovereign bonds – or debt securities issued by national governments, according to experts.

The chief executive of UK-based global financial advisory firm de Vere Group, Nigel Green, believes gold could reach $US6000 by the end of this year.

“Gold benefits when political signals create uncertainty about growth, inflation, and international cooperation,” he said.

The jump in gold also reflects mounting concern in financial markets over government borrowing as debt levels across major economies continue to rise.

Also propelling central banks and investors to seek refuge in gold has been uncertainty in key bond markets, such as Japan.

Green believes this week’s spike in the gold price is more than a blip.

“The $US5000 milestone marks a beginning rather than an endpoint. We believe $US6000 is not unrealistic by the end of the year.”

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