Gold reaches fresh record high – how far could it go?

Gold (and silver) prices both hit record highs this week on the back of threats by US President Donald Trump to impose fresh tariffs on European countries that have so far opposed to his desire to takeover Greenland.

What happened on tariffs?: Last week, Trump announced a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland would come into effect from 1 February, and could rise to 25% from June – if they stand in the way of reaching a deal on Greenland.

The price of gold hit $4,689.39 (£3,499) per ounce on Monday, with silver peaking at $94.08 an ounce.

Why has gold risen?: Precious metals like gold are seen ‘safe’ assets to invest in during times of political uncertainty. When stock markets fall, investors tend to flee to these safe havens, which drives up their prices.

Central banks often invest more heavily in physical gold during uncertainty, decreasing its supply and driving up prices even more.

Gold prices have already surged over the past year amid global political tensions. Last week, gold jumped on the back of unrest in Iran.

Investment experts say the rally still isn’t over. Central banks are continuing to buy it, a trend that doesn’t seem to have slowed yet. If that continues, gold prices should continue to rise.

How do you invest in gold?

If you are thinking about investing in gold, it’s important that it forms part of a diversified portfolio of assets.

You can invest in gold without physically owning it by purchasing a special type of investment fund, trust or exchange-traded fund (ETF).

You can access these types of investments through a Stocks and Shares ISA, which is an account that allows you to invest up to £20,000 per year tax-free.

Check out our pick of the Best Stocks and Shares ISAs to help you find a suitable account.

If you’re new to investing, we’ve also got a roundup of the Best Stocks and Shares ISAs for Beginners.

You can also invest in a gold fund through a self-invested personal pension (SIPP).

Alternatively, it’s possible to purchase gold bars and coins from reputable and secure dealers.