Gold (GC=F) rose above $5,000 an ounce on Sunday, hitting the major milestone earlier than Wall Street expected, raising questions about the stunning speed of the rally in precious metals.

Gold’s surge has become a hallmark of the so-called “debasement trade,” as investors buy assets to hedge against losing purchasing power while soaring government debt around the world raises concerns.

“The rise in precious metals prices is breathtaking and profoundly scary,” wrote Robin Brooks, Senior Fellow at the Brookings Institution on Sunday, noting the rise in gold prices is “part of something much bigger.”

“We’re at the start of a global debt crisis, with markets increasingly fearful governments will attempt to inflate away out-of-control debt,” Brooks wrote.

Brooks noted that while the US dollar (DXY.NY-B) remained relatively stable during the second half of last year, it has begun the year on a downward trajectory.

“A falling dollar will super-charge the rise in gold prices and the debasement trade because it boosts the purchasing power of non-dollar buyers,” Brooks wrote.

Goldman Sachs recently raised its year-end price target from $4,900 to $5,400, noting increased participation from private investors seeking to diversify portfolios and protect wealth.

“We see the risks to our upgraded gold price forecast as two-sided but still significantly skewed to the upside because private sector investors may diversify further on lingering global policy uncertainty,” the analysts said.

Bullion has made turns higher at every major geopolitical event this year, including the US capture of Venezuelan leader Nicolás Maduro and President Trump’s tariff threats in pursuit of Greenland.

The precious metal has rallied 15% year-to-date, following a 65% surge in 2025.

Though foreign central bank demand for gold has been strong amid trimmed exposure to US Treasurys, the Brookings Institution’s Brooks argued that does not explain the massive rise in gold prices so far this year.

“The fact that this is a broad bubble across all precious metals argues against central banks being a key driver,” wrote Brooks.

Elsewhere in precious metals (SI=F) topped $100 for the first time on Friday, continuing its rise Sunday night to hover above $107. Platinum (PL=F) also touched new highs, gaining over 40% so far this year..

Copper (HC=F) on Friday rose to a record high above $13,000 per ton in London.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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