Gold has surged above $4,000 (£2,985) an ounce, reaching a record high. Investors are turning to the precious metal as political instability and economic uncertainty unsettle markets worldwide. The rally marks gold’s strongest surge since the 1970s. Prices have jumped nearly a third since April, when US President Donald Trump’s tariffs disrupted global trade and rattled financial systems.
US government shutdown fuels investor anxiety
The US government shutdown, now in its second week, is heightening market uncertainty. Analysts say delays in key economic data have amplified investor concerns. 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 — 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 strengthens gold’s appeal
Christopher Wong, rates strategist at OCBC in Singapore, said the shutdown is acting as 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 warned that prices could decline if the standoff ends sooner than expected.
Analysts amazed by gold’s record-breaking surge
Heng Koon How, head of markets strategy at UOB Bank, described the rally as “unprecedented” and far beyond forecasts. He linked the rise to a weaker US dollar and growing activity from retail investors. 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.
Demand rises from institutions to households
Gregor Gregersen, founder of Silver Bullion, said his firm 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 linger despite record highs
Analysts warn that gold’s rally could falter 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 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 rise in inflation could again force the Fed to act, threatening gold’s momentum.
Trump’s pressure on the Fed adds market volatility
Wong said expectations that the Federal Reserve will cut rates are supporting gold’s rise. Yet Trump’s ongoing attacks on the central bank 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 “erodes 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 critical.”
