Gold has surged past the $4,000 (£2,985) mark for the first time ever, reaching historic highs. Investors are flocking to the precious metal as global tensions and economic fears shake confidence in traditional markets. The rally marks gold’s most powerful climb since the 1970s. Prices have jumped by nearly 30% since April, when US President Donald Trump’s tariffs disrupted global trade and rattled financial systems.
Government shutdown fuels market unease
The US government shutdown, now in its second week, is amplifying global market anxiety. Analysts warn that delays in key economic data have left investors uncertain about the outlook. Gold, known as a safe haven in turbulent times, continues to benefit from this instability. On Wednesday afternoon in Asia, the spot price — the live rate for immediate delivery — surpassed $4,036 an ounce. Gold futures, which reveal market expectations, reached the same level on 7 October. Futures allow traders to lock in a price for future deals.
Political deadlock drives investors to safety
Christopher Wong, rates strategist at OCBC in Singapore, described the shutdown as a “tailwind for gold prices.” He said Washington’s repeated budget battles have sent investors fleeing toward safer assets. During Trump’s first term, gold rose almost 4% during a similar month-long shutdown. Wong warned, however, that if the government resolves the impasse quickly, gold prices might pull back.
Experts stunned by gold’s unstoppable momentum
Heng Koon How, head of markets strategy at UOB Bank, called gold’s rally “unprecedented” and far beyond forecasts. He linked the surge to a weakening US dollar and a wave of retail investor activity. Many buyers now choose exchange-traded funds (ETFs) instead of physical bullion. According to the World Gold Council, investors have poured a record $64 billion into gold ETFs this year.
Growing demand from banks and private investors
Gregor Gregersen, founder of Silver Bullion, said customer numbers have more than doubled in the past year. He noted that retail investors, banks, and wealthy families increasingly view gold as protection against economic volatility. “Most of our clients are long-term holders,” Gregersen said, explaining that many store their gold for more than four years. “Gold will eventually dip, but I believe it will keep climbing for at least five years,” he added.
Gold’s glitter hides potential risks
Analysts warn that the rally could lose steam if market conditions shift. OCBC’s Wong said prices may fall if interest rates rise or if political tensions ease. In April, gold dropped about 6% after Trump decided not to dismiss Federal Reserve Chair Jerome Powell. “Gold acts as a hedge against uncertainty, but that hedge can unwind quickly,” Wong said.
In 2022, gold fell from $2,000 to $1,600 an ounce when the Federal Reserve raised interest rates to curb post-pandemic inflation, Heng recalled. A sudden rebound in inflation could again force the Fed to act, threatening gold’s record-breaking run.
Trump’s feud with the Fed adds fuel to market tension
Wong said expectations that the Federal Reserve will soon lower interest rates have made gold even more attractive. Yet Trump’s growing feud with the Fed is adding to the chaos. He has publicly accused Jerome Powell of moving too slowly and tried to dismiss Fed Governor Lisa Cook. Wong warned that such attacks “erode confidence in the Fed’s credibility as an inflation-fighting institution.” In a world gripped by political tension and economic fear, he added, gold’s role as a safe haven “has never been more vital.”
