After US President Donald Trump backed away from some of his harshest threats over Greenland, gold prices retreated on Thursday.

Following a sharp rally in the first three weeks of the new year, the question of whether gold can ultimately reach USD 5,000 has become almost a foregone conclusion. However, this latest shift in the news flow may have slowed the pace at which prices can hit that level in the short term.

Trump announced that his meeting with the NATO Secretary General had produced a framework agreement for his efforts to secure control over Greenland. He also stated that he would not impose the previously threatened tariffs on countries opposing his plan. This sparked a rally in US benchmark equity indices and Treasuries, while the US dollar strengthened.

If another “TACO moment” emerges in the coming weeks — with geopolitical risks quickly easing and safe-haven flows rotating back into equities and bonds — gold’s upside momentum could be significantly weakened. Safe-haven demand remains a key pillar of support, but gold has also found a new role as an insurance asset.

Its value lies in its ability to hedge against losses in a world increasingly shaped by economic and political shocks — including questions over the future independence of the Federal Reserve and uncertainty surrounding US policy toward Venezuela. This “insurance value” may help gold test and hold the crucial USD 5,000 level.

Unlike past rallies that were driven primarily by rate-cut expectations, dollar swings or isolated geopolitical events, gold has now evolved into a broader macro hedge — an insurance asset for the stability of the credit system, the monetary system and the geopolitical order.

After its epic surge in 2025, gold’s continued rise no longer needs to rely on the same catalysts as before. As long as uncertainty persists, prices can naturally extend their uptrend.

The USD 5,000 mark is not an unattainable fantasy for gold; reaching that level would be a reasonable extension of gains already achieved. The bigger question is whether gold can stay there.

Market Commentary:

For gold to remain sustainably above USD 5,000, the macro backdrop will need to support this higher long-term valuation. That would imply structurally lower real interest rates, ongoing de-dollarisation and diversification of global reserves, a persistently fractured geopolitical landscape, and continued strong demand from institutions and central banks.