Gold crosses $4,000 an ounce for the first time as investors flock to safety

Gold prices surged past the $4,000 mark for the first time in history on Wednesday, extending a months-long rally fueled by fears over economic instability, geopolitical tensions, and growing expectations of further interest rate cuts by the US Federal Reserve.

Spot gold climbed 0.9% to $4,017.16 per ounce at 0442 GMT, while US gold futures for December delivery rose to $4,040, reflecting the market’s strong bullish momentum. The metal’s ascent marks a new milestone in what has been one of the most dramatic rallies in recent years — spot gold is now up 53% so far in 2025, following a 27% gain in 2024.
Analysts say the surge reflects a perfect storm of factors: deepening global uncertainty, a weakening dollar, aggressive central bank purchases, persistent inflation concerns, and mounting public debt across major economies. Investors have also been pouring money into gold-backed exchange-traded funds (ETFs), viewing the metal as a stable hedge amid volatile markets.
“Confidence in gold is overwhelming right now,” said independent metals trader Tai Wong. “With the Fed likely to keep cutting rates, the next psychological target will be $5,000. Unless global debt or dollar weakness changes direction, this momentum could last well into next year.”
The rally comes as the US government shutdown enters its seventh day, halting the release of key economic data and clouding the Fed’s decision-making process. Investors now expect a 25-basis-point rate cut later this month, followed by another in December — a dovish shift that has further weakened the dollar and boosted non-yielding assets like gold.
KCM Trade Chief Market Analyst Tim Waterer noted that “rising uncertainty almost always lifts gold prices,” adding that the combination of a US fiscal impasse, softening interest rates, and geopolitical instability “creates a perfect environment for safe-haven demand.” Still, he cautioned that traders could take profits near the $4,000 level, creating short-term volatility.
Beyond the United States, political unrest in France and Japan has also added fuel to the rally. Japan’s recent election of Sanae Takaichi as prime minister — along with expectations of increased deficit spending — has heightened fears of inflation and debt expansion, pushing more investors toward gold. “This is part of the broader ‘run it hot’ trade we’re seeing globally,” said Capital.com analyst Kyle Rodda.
Financial giants Goldman Sachs and UBS have both raised their 2026 gold price forecasts, citing robust central bank demand, accelerating ETF inflows, and an extended period of low-to-negative real interest rates. Many central banks, particularly in Asia and the Middle East, have continued diversifying their reserves away from the US dollar, adding further strength to the market.
Other precious metals joined the rally: silver rose 1.3% to $48.44 per ounce, platinum climbed 2.4% to $1,657.33, and palladium advanced 2.3% to $1,368.68.