Gold has climbed past $4,000 (£2,985) an ounce, reaching a historic peak. Investors are turning to the precious metal as political instability and economic uncertainty unsettle global markets. The rally marks gold’s strongest surge since the 1970s. Prices have risen nearly a third since April, after US President Donald Trump’s tariffs disrupted international trade and rattled financial systems.
Government shutdown intensifies market concerns
The US government shutdown, now in its second week, is driving global investor anxiety. Analysts say delays in releasing key economic data have worsened market uncertainty. Gold, long regarded as a safe haven, continues to benefit from volatility. On Wednesday afternoon in Asia, spot gold — the live price for immediate delivery — surpassed $4,036 an ounce. Gold futures, reflecting market sentiment, reached the same level on 7 October. Futures contracts allow traders to lock in prices for delivery at a later date.
Political deadlock strengthens demand for gold
Christopher Wong, rates strategist at OCBC in Singapore, said the shutdown is a “tailwind for gold prices.” He explained that repeated clashes over government spending have pushed investors toward safer assets. During Trump’s first term, gold rose nearly 4% during a similar month-long shutdown. Wong cautioned that prices could fall if the standoff ends sooner than expected.
Analysts surprised by record-breaking rally
Heng Koon How, head of markets strategy at UOB Bank, described the surge as “unprecedented” and far beyond forecasts. He attributed the rise to a weaker US dollar and increased retail investor activity. Many buyers now prefer exchange-traded funds (ETFs) instead of physical gold. The World Gold Council reported a record $64 billion invested in gold ETFs this year.
Gold demand rises from institutions to households
Gregor Gregersen, founder of Silver Bullion, said his company has seen customer numbers more than double over the past year. He noted that retail investors, banks, and wealthy families increasingly view gold as a safeguard against economic 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 I expect it to rise for at least five more years,” he added.
Risks remain despite record highs
Analysts warn that gold’s surge could stall if market conditions shift. OCBC’s Wong said prices could fall if interest rates rise or political tensions ease. In April, gold dropped about 6% after Trump chose not to dismiss Federal Reserve Chair Jerome Powell. “Gold is a hedge against uncertainty, but that hedge can quickly unwind,” 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 prompt the Fed to act, threatening gold’s momentum.
Trump’s pressure on the Fed adds to volatility
Wong said expectations that the Federal Reserve will cut rates are boosting gold’s appeal. Yet Trump’s repeated attacks on the Fed 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 marked by political tension and economic uncertainty, he added, gold’s role as a safe haven “has never been more vital.”
