Gold has surged past $4,000 (£2,985) an ounce, reaching an all-time high. Investors are seeking refuge in the precious metal as political instability and economic uncertainty unsettle global markets. The rally marks gold’s strongest climb since the 1970s. Prices have jumped nearly a third since April, when US President Donald Trump’s tariffs disrupted international trade and rattled financial systems.
US government shutdown drives market anxiety
The US government shutdown, now in its second week, is amplifying investor concerns worldwide. Analysts say delays in releasing key economic data have worsened uncertainty. Gold, long considered a safe haven, continues to benefit from market 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 delivery at a future date.
Political deadlock fuels demand for gold
Christopher Wong, rates strategist at OCBC in Singapore, described the shutdown as a “tailwind for gold prices.” He said repeated political 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 impasse ends sooner than expected.
Analysts stunned by gold’s record rally
Heng Koon How, head of markets strategy at UOB Bank, called the surge “unprecedented” and far beyond forecasts. He attributed the rise to a weaker US dollar and increased retail investor participation. 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.
Growing demand from banks 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 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 remain despite historic highs
Analysts warn that gold’s rally could lose momentum if market conditions shift. 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 unwind quickly,” 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 spike in inflation could again force the Fed to act, threatening gold’s momentum.
Trump’s feud with the Fed heightens volatility
Wong said expectations of Federal Reserve rate cuts are supporting gold’s rise. 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.”
