Gold raced past US$4,000 an ounce for the first time on Wednesday as investors piled into a historic rally in the safe-haven asset to hedge against global economic and geopolitical uncertainties, while also betting on U.S. interest rate cuts.
Spot gold was up 1.3 per cent at $4,034.73 per ounce by 1110 GMT. U.S. gold futures for December delivery gained 1.3 per cent to $4,056.80.
Silver also latched on to gold’s rally, gaining 2.3 per cent to $48.91 per ounce, and just a little away from its all-time high of $49.51.
Traditionally, gold is seen as a store of value during times of instability. Spot gold is up about 54 per cent year-to-date, after gaining 27 per cent in 2024. It is one of the best-performing assets of 2025, outpacing advances in global equity markets and bitcoin and losses for the U.S. dollar and crude oil.
The rally has been driven by a cocktail of factors, including expectations of interest rate cuts, ongoing political and economic uncertainty, solid central bank buying, inflows into gold exchange-traded funds (ETFs) and a weak dollar.
“Background factors are much the same as before, in terms of geopolitical uncertainty, with the added spice of the government shutdown,” StoneX analyst Rhona O’Connell said.
“The latter is not impeding strong equities but nonetheless there will be a degree of risk mitigation via bullion.”
The ongoing U.S. government shutdown, into its eighth day on Wednesday, has delayed the release of key economic data, forcing investors to rely on non-government sources to assess the timing and scope of Fed rate cuts.
Markets are pricing in a 25-basis-point rate cut at the Fed’s upcoming meeting, with a similar reduction expected in December.
Global crises, including the Middle East conflict and the war in Ukraine, have also contributed to increased demand for bullion, with political turmoil in France and Japan further amplifying the rush for safe-haven assets.
Renewed accumulation of developed-market ETFs for the first time in five years is also among the factors boosting this rally, said Michael Hsueh, precious metals analyst at Deutsche Bank.
Globally, inflows into gold ETFs hit $64 billion year-to-date, according to data from the World Gold Council, with a record $17.3 billion in September alone.
Analysts expect strong inflows into gold-backed ETFs, central bank buying and lower U.S. interest rates to support gold prices in 2026 as well, prompting Goldman Sachs and UBS to raise their price outlooks.
“We had expected gold to reach the ($4,000) level closer to the end of the year, but the direction of travel remains consistent with our broader outlook,” said Nitesh Shah, commodities strategist at WisdomTree, reiterating their forecast that prices would hit $4,530 an ounce by the end of the third quarter of 2026.
A “fear of missing out” is also boosting the rally, analysts said.
“One headwind for gold would be the Fed getting more hawkish on gold, but for the time being, Trump wants to see lower U.S. interest rates and that should keep increasing the appeal of gold,” said UBS analyst Giovanni Staunovo.
HSBC on Wednesday raised its average silver price forecasts for 2025 to $38.56 per ounce and for 2026 to $44.50, citing expectations for high gold prices, renewed investor demand and anticipated volatile trading.
The momentum seeped into other precious metals as well, with platinum gaining two per cent to $1,651.39, while palladium climbed 3.9 per cent to $1,390.39.
