Gold rush: Why the precious metal is nearing a record $5,000 and how to buy it

Gold has always seen its fortunes fluctuate but it has been on an upward trajectory over the past few months as investors seek a safe haven amid economic and political uncertainty. It has enjoyed its biggest rally since the 1970s, rising by about a half in value since April when US President Donald Trump unveiled his global trade tariffs. Continuing tensions over Greenland, Iran, Ukraine and Venezuela - and fears of conflict elsewhere in the world - have seen increasing numbers of private investors and savers contemplate gold as an alternative to other assets or investment products.

The rally also underlines investors’ unease about debt, inflation and government policy direction.

Gold hit $4,950 an ounce on Friday, after passing through $4,800 earlier in the week, up from about $3,300 last April.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: “It took the US president a single minute to flip sentiment from fear to greed. That came during Wednesday’s Davos speech, when he said he is not considering military action to take Greenland by force - even though he could - and that discussions with Nato allies on Greenland had led to a framework that justified rolling back the latest tariffs imposed on a handful of European countries.

“A relief rally followed, but didn’t last long. As we enter the second year of the Trump administration, it is increasingly clear - even for those who still had doubts - that US deals and agreements offer little guarantee of stability. New tariffs could be announced at any time.”

People have a number of options when it comes to investing in gold, with the most obvious perhaps being to buy into the physical product itself, be that gold bars, coins or jewellery. An obvious advantage if this is stored at home is its ready accessibility. There is also no added volatility or ongoing fees. Naturally, any physical gold must be properly secured.

Alternatives include gold mining stocks, which have no storage requirements but have no direct utility as a medium of exchange, and gold via exchange-traded funds (ETFs). Those funds can invest in physical gold stores, related mining stocks, gold futures, or possible combinations of these. ETFs tend to offer investors greater liquidity, with steady demand making them easy to sell on. However, there are likely to be fund fees, which will dilute returns over time.

The gold rush comes as new analysis reveals that the price of silver - another precious metal - has surged at 15 times the rate of UK house prices over the last 20 years.

Since 2006, silver has risen by 1,300 per cent in sterling terms while gold is up around 1,100 per cent, both far outpacing the growth of UK house prices and major global stock indices, according to the analysis from investing and trading platform IG.