 "Gold prices have risen over 50% this year amid global trade uncertainties, concerns over the Federal Reserve’s independence, and questions about US fiscal stability.")
Spot gold climbed above $4,000 an ounce for the first time on Wednesday, reaching $4,001.01 at its peak, driven by fresh concerns over the US economy and a potential government shutdown. Just two years ago, gold traded below $2,000 an ounce, making this milestone a dramatic rise that now outpaces equity returns this century.
The price of gold has surged more than 50% this year as uncertainties over global trade, the Federal Reserve’s independence and US fiscal stability weigh on markets. Geopolitical tensions have further boosted demand for the precious metal, while central banks have continued to purchase gold at a sustained pace.
Investor shift towards gold amid market volatility
The latest rally has been reinforced by fears of market shocks stemming from the funding impasse in Washington. The Federal Reserve’s recent start to a monetary easing cycle has also favoured gold, which does not yield interest. This has prompted a surge in investor interest, with bullion-backed exchange-traded funds recording their largest monthly inflow in over three years during September.
Charu Chanana, a strategist at Saxo Capital Markets Pte, said, “Gold breaking $4,000 isn’t just about fear, it’s about reallocation. With economic data on pause and rate cuts on the horizon, real yields are easing, while AI-heavy equities look stretched. Central banks built the base for this rally, but retail and ETFs are now driving the next leg," reported Bloomberg.