Gold has surged past $4,000 (£2,985) an ounce, reaching an all-time high. Investors are flocking to the precious metal amid growing fears over political instability and economic turbulence worldwide. The rally marks gold’s strongest surge since the 1970s. Prices have risen nearly one-third since April, when US President Donald Trump’s tariffs disrupted international trade and rattled markets.
US shutdown intensifies market fears
The ongoing US government shutdown, now in its second week, is heightening investor anxiety. Analysts say delays in releasing key economic data have added to uncertainty. Gold, widely considered a safe haven, continues to gain from this volatility. On Wednesday afternoon in Asia, spot gold — the live market price for immediate delivery — exceeded $4,036 an ounce. Gold futures, which reflect market sentiment, reached the same level on 7 October. Futures contracts allow traders to lock in a price for delivery at a future date.
Political deadlock pushes investors toward gold
Christopher Wong, rates strategist at OCBC in Singapore, called the shutdown a “tailwind for gold prices.” He said repeated clashes over public spending have driven investors into safer assets. During Trump’s first term, gold rose nearly 4% during a month-long shutdown. Wong warned that prices might fall if the government resolves the impasse sooner than expected.
Analysts surprised by gold’s record-breaking climb
Heng Koon How, head of markets strategy at UOB Bank, described the surge as “unprecedented” and beyond forecasts. He linked the rise to a weaker US dollar and growing retail investor activity. Many buyers are choosing exchange-traded funds (ETFs) rather than physical gold. The World Gold Council reported that $64 billion has flowed into gold ETFs this year, setting a new record.
Demand spreads from banks to retail investors
Gregor Gregersen, founder of Silver Bullion, said his customer numbers have more than doubled in the past year. He noted that retail investors, banks, and wealthy families increasingly see gold as protection against global instability. “Most of our clients are long-term holders,” Gregersen said, adding that many store their gold for over four years. “Gold will eventually dip, but in this environment, I expect it to rise for at least five more years,” he added.
Risks remain despite record highs
Experts warn that gold’s rally could stall if economic conditions change. OCBC’s Wong said prices may fall if interest rates rise or geopolitical tensions ease. In April, gold dropped about 6% after Trump chose not to dismiss Federal Reserve Chair Jerome Powell. “Gold acts as a hedge against uncertainty, but that hedge can quickly unravel,” Wong said.
In 2022, gold fell from $2,000 to $1,600 an ounce after the Federal Reserve raised rates to curb post-pandemic inflation, Heng recalled. A sudden surge in inflation could again push the Fed to act, threatening gold’s momentum.
Trump’s feud with the Fed adds to volatility
Wong said expectations that the Federal Reserve will cut interest rates are supporting gold’s appeal. Yet Trump’s escalating attacks on the central bank are unsettling markets. He has accused Jerome Powell of moving too slowly and attempted to dismiss Fed Governor Lisa Cook. Wong warned that such interference “undermines confidence in the Fed’s credibility as an inflation-fighting authority.” In a world filled with political tension and economic uncertainty, he added, gold’s role as a safe haven “has never been more essential.”
