Gold has surged past $4,000 (£2,985) an ounce, reaching an all-time high. Investors are flocking to the precious metal as political instability and economic uncertainty shake confidence in global markets. The rally marks gold’s strongest surge since the 1970s. Prices have climbed nearly a third since April, when US President Donald Trump’s tariffs disrupted international trade and unsettled financial systems.
US government shutdown drives market anxiety
The US government shutdown, now in its second week, is fueling investor uncertainty worldwide. Analysts say delays in releasing key economic data have amplified market concerns. Gold, long regarded as a safe haven, continues to benefit from global volatility. On Wednesday afternoon in Asia, spot gold — the live price for immediate delivery — climbed above $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 future delivery.
Political deadlock pushes investors toward gold
Christopher Wong, rates strategist at OCBC in Singapore, said the shutdown is acting as a “tailwind for gold prices.” He explained that repeated political clashes over government spending have driven investors toward safer assets. During Trump’s first term, gold rose nearly 4% during a similar month-long shutdown. Wong cautioned that prices could retreat if the standoff ends sooner than expected.
Analysts astonished by gold’s record rally
Heng Koon How, head of markets strategy at UOB Bank, described the surge as “unprecedented” and far beyond forecasts. He linked the rally to a weaker US dollar and rising participation from retail investors. Many buyers now prefer exchange-traded funds (ETFs) over physical gold. According to the World Gold Council, investors have poured a record $64 billion into gold ETFs this year.
Demand grows from banks to private investors
Gregor Gregersen, founder of Silver Bullion, said his company has seen customer numbers more than double in the past year. He noted that retail investors, banks, and wealthy families increasingly see gold as protection 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 in this environment, I expect it to rise for at least five more years,” he added.
Risks linger despite record highs
Analysts warn that gold’s surge could falter if conditions change. OCBC’s Wong said prices may fall if interest rates rise or geopolitical tensions ease. In April, gold fell about 6% after Trump chose not to dismiss Federal Reserve Chair Jerome Powell. “Gold serves as a hedge against uncertainty, but that hedge can quickly unwind,” Wong said.
In 2022, gold dropped from $2,000 to $1,600 an ounce after the Federal Reserve raised rates to curb post-pandemic inflation, Heng noted. A sudden rise in inflation could again push the Fed to act, threatening gold’s momentum.
Trump’s feud with the Fed intensifies volatility
Wong said expectations of Federal Reserve rate cuts are supporting gold’s appeal. Yet Trump’s ongoing 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 crucial.”
