Gold has smashed records, soaring above $4,000 (£2,985) an ounce for the first time. Investors are rushing into the precious metal as fears over global politics and economic stability intensify. The surge marks gold’s steepest rally since the 1970s. Prices have leapt by almost one-third since April, when US President Donald Trump’s new tariffs shook international trade and spooked global markets.
Shutdown crisis deepens market unease
The ongoing US government shutdown, now in its second week, has rattled investors around the world. Analysts say delays in key economic data have clouded the outlook for the global economy. Gold, widely seen as a safe haven, tends to rise when markets face uncertainty. On Wednesday afternoon in Asia, the spot price — the rate for immediate delivery — climbed past $4,036 an ounce. Gold futures, which show investor sentiment, reached the same level on 7 October. Futures contracts let traders lock in prices for future transactions.
Political gridlock gives gold powerful momentum
Christopher Wong, a rates strategist at OCBC in Singapore, said the US shutdown is providing a “tailwind for gold prices.” He explained that repeated political clashes over government spending have driven investors toward safer options. During Trump’s first term, gold gained almost 4% during a month-long shutdown. Wong warned, however, that prices might dip if the standoff ends sooner than expected.
Experts stunned by gold’s relentless surge
Heng Koon How, head of markets strategy at UOB Bank, called gold’s rise “unprecedented” and beyond all expectations. He linked the rally to a weaker US dollar and the growing influence of small-scale investors. Many are opting for exchange-traded funds (ETFs) instead of physical gold. The World Gold Council reported a record $64 billion flowing into gold ETFs so far this year.
From institutions to families, demand for gold explodes
Gregor Gregersen, founder of Silver Bullion, said his company has seen customer numbers more than double in the past year. He noted that banks, retail investors, and wealthy families increasingly view gold as a shield against global instability. “Most of our clients are long-term holders,” Gregersen said, adding that many keep their gold for over four years. “Gold will eventually correct, but in this climate, I expect it to keep rising for at least five years,” he added.
Hidden risks behind gold’s record highs
Despite the rally, analysts warn that gold remains vulnerable. OCBC’s Wong said prices could fall if interest rates rise or if geopolitical tensions ease. In April, gold lost about 6% after Trump decided not to dismiss Federal Reserve Chair Jerome Powell. “Gold is a hedge against uncertainty, but that hedge can unwind quickly,” Wong said.
In 2022, gold plunged from $2,000 to $1,600 an ounce after the Federal Reserve raised rates to fight post-pandemic inflation, Heng recalled. A sudden resurgence of inflation could again push the Fed to act, threatening the metal’s strong run.
Trump’s clashes with the Fed add fuel to market chaos
Wong said expectations that the Federal Reserve will soon cut rates are making gold even more attractive. Yet Trump’s mounting criticism of the Fed is unsettling markets. He has accused Jerome Powell of moving too slowly and tried to remove Fed Governor Lisa Cook. Wong warned that such attacks “undermine confidence in the Fed’s ability to act as a credible inflation-fighting institution.” In a world gripped by political tension and economic volatility, he added, gold’s role as a safe haven “has never been more crucial.”
