Gold surged beyond the historic $4,000 per ounce milestone on Wednesday, as investors turned to the precious metal amid rising global economic and geopolitical tensions and expectations of further US Federal Reserve rate cuts.
By 03:00 GMT, spot gold rose 0.7% to $4,011.18 an ounce, while US gold futures for December delivery climbed 0.7% to $4,033.40. Seen as a safe haven during turbulent times, gold has gained 53% so far this year, following a 27% jump in 2024, reports Reuters.
Analysts say investor confidence in the metal remains strong, with some eyeing the next target of $5,000 if the Fed continues easing monetary policy.
Independent metals trader Tai Wong said, “There will be some bumps in the road like a lasting truce in the Mideast or Ukraine but the fundamental drivers of the trade, massive and growing debt, reserve diversification, and a weaker dollar are unlikely to change in the medium term.”
The rally has been underpinned by expectations of rate cuts, persistent political and economic instability, central bank purchases, and steady inflows into gold exchange-traded funds (ETFs).
The ongoing US government shutdown, now in its 7th day, has delayed major economic data releases, pushing investors to rely on alternative indicators while anticipating two more rate cuts this year.
KCM Trade Chief Market Analyst Tim Waterer said, “Rising uncertainty levels tend to fuel gains in the gold price and we are seeing this theme play out again.
“Market dynamics of lower US interest rates and the ongoing government shutdown are still working in favour of gold. But the temptation to take profits around the $4,000 mark pose a potential short-term risk.”
Analysts also noted that political upheavals in France and Japan have further strengthened safe-haven demand.
The election of Japan’s Sanae Takaichi, coupled with expectations of increased fiscal spending, has reinforced the “run it hot” investment narrative, said Capital.com analyst Kyle Rodda.
Major banks, including Goldman Sachs and UBS, have raised their gold price forecasts for 2026, citing sustained central bank buying and robust ETF inflows.
Among other precious metals, spot silver gained 1.3% to $48.42 an ounce, platinum advanced 2.5% to $1,658.40, and palladium rose 1.8% to $1,361.89.
