Gold Still Safe Haven?

At the start of 2026, gold is beginning to behave less like a traditional defensive asset and more like a speculative trade. Although it is still considered a reliable store of value during economic stress, the market is slowly redefining how the metal fits into investment portfolios.

Investors have long relied on gold during recessions, inflation spikes, or stock market weakness because it is viewed as a way to preserve wealth and reduce exposure to sudden losses.

Yet market instability does not always move gold in a predictable direction. Prices have recently experienced sharp swings, setting records and producing large daily movements that were once rare. Even so, gold has gained roughly 15 percent so far this year.

Historically, the metal has seen dramatic rallies. In 1979 prices surged 144 percent during intense inflation and political uncertainty. In 2020 gold climbed 24 percent as the global pandemic disrupted economies worldwide.

Today, increasing geopolitical tensions are again supporting demand and pushing prices higher.

Access to precious metals investing has also become simpler. Investors can now trade exchange traded funds that track gold and silver just like ordinary shares. One of the most widely held funds, the SPDR Gold ETF, recorded its strongest inflows in August according to FactSet.

In recent years U.S. markets have experienced waves of so called meme stock trading, where coordinated retail activity fuels outsized rallies. Analysts say a similar behavior is now appearing in precious metals, with gold and silver moving in ways that resemble speculative equities.

Gold rose 27 percent in 2024 and then 67 percent in 2025. The metal first crossed $4,000 per troy ounce in October and surpassed $5,000 early this year.

Joe Kavotoni, senior market strategist and head of U.S. public policy at the World Gold Council, said that a wide range of participants including hedgers, hedge funds, speculators, and retail investors all moved aggressively and lifted prices beyond sustainable levels.

Although gold experienced its largest one day drop on January 30, it still remains positive for the year. However, wide fluctuations have led investors to question whether it still functions as a stable long term holding.

At the same time, Bitcoin fell about 50 percent after reaching a peak above $126,000 in October. Some traders leaving cryptocurrencies may be shifting into metals, which can add further instability to price action.

David Skutt, a market analyst at Forex.com, noted that gold’s historical role as a safe asset is being altered, describing it as trading more like a momentum driven risk asset.

Overall, the metal now shows two distinct characteristics. It offers the possibility of strong gains but also carries higher risk due to volatility and geopolitical pressures. Gold continues to serve as an important barometer for global markets even as its reputation evolves alongside investors’ appetite for speculation.

Silver has shown similar behavior. Over the past year its price more than tripled, yet on January 31 it dropped 31 percent in a single session, the steepest fall since 1980. Even after that decline, silver remains up about 138 percent over the last twelve months.

Gold recently posted another notable advance, rising around 6 percent in one day, one of its strongest daily performances in years. The Cboe Gold Volatility Index has climbed to levels not seen since the pandemic period, indicating increased trading activity.

In conclusion, investors should recognize that gold now presents both opportunity and danger. It still functions as a hedge but also participates in speculative market behavior, reflecting the changing nature of global finance.