Gold Surges Past $5000 Amid Trader Fears of Missing Out

Gold prices have recently surged past the 5000 mark for the first time, catching analysts by surprise. Just a month prior, Goldman Sachs projected that the price of an ounce would reach 4815 by the end of the year, while JP Morgan anticipated a push towards the 5000 threshold. The current rally, marked by a significant increase in demand, has left many in the financial community re-evaluating their forecasts.

This extraordinary rise can be attributed to several factors, including strong demand from central banks and cyclical support arising from recent Federal Reserve rate cuts. The price of gold jumped significantly throughout 2025, climbing by 64 per cent—representing the largest annual increase since 1979.

Additionally, a sense of urgency has emerged among traders, driven by a fear of missing out, commonly known as FOMO. This sentiment has led to a less cautious attitude towards purchasing gold, raising concerns that the market could be forming a bubble.

Recent actions by the Japanese government have also influenced the gold market. Reports indicate that authorities might be intervening in the foreign exchange market to stabilise the yen, which has depreciated sharply against the dollar. A stronger yen can often heighten gold prices, as it reduces the cost of gold in other currencies.

The dynamics of the gold market have shifted significantly since the 2008 global financial crisis, with central banks transitioning from net sellers to net buyers. The erratic policymaking associated with recent political tensions, particularly in the United States, has also heightened geopolitical risks, prompting traders to seek refuge in safe-haven assets like gold.

As market conditions evolve, the focus will shift to upcoming leadership decisions within the Federal Reserve. Spec