Gold has surged to an unprecedented high of more than $4,000 (£2,985) an ounce. Investors are fleeing risky markets and turning to the precious metal as fears over global politics and economic stability intensify. The rally marks gold’s strongest performance since the 1970s. Prices have climbed by nearly 33% since April, when US President Donald Trump’s new tariffs sent shockwaves through international trade.
Global uncertainty and US shutdown fuel investor fear
The US government shutdown, now in its second week, has deepened concerns among investors. Analysts say the delay in releasing critical economic data has added to uncertainty in already fragile markets. Gold, seen as a safe haven during turbulence, is gaining sharply as investors seek protection. On Wednesday afternoon in Asia, spot gold — the live price for immediate delivery — exceeded $4,036 an ounce. Gold futures, reflecting investor expectations, hit the same level on 7 October. These contracts let traders buy or sell gold at a fixed price for future delivery.
Political stalemate lifts gold to new heights
Christopher Wong, a rates strategist at OCBC in Singapore, called the ongoing shutdown a “tailwind for gold prices.” Prolonged disputes over public spending have pushed investors toward assets they consider secure. During Trump’s first term, gold rose nearly 4% during a similar month-long shutdown. Wong cautioned that a quick resolution in Washington could cool the rally sooner than some expect.
Analysts astonished by the unstoppable rally
Heng Koon How, head of markets strategy at UOB Bank, described the rise as “unprecedented” and far beyond what analysts predicted. He linked the rally to a weaker US dollar and the growing role of retail investors. Many buyers now prefer financial products like exchange-traded funds (ETFs) rather than physical gold. According to the World Gold Council, investment in gold ETFs has reached a record $64 billion this year.
Gold rush spreads from banks to everyday investors
Gregor Gregersen, founder of Silver Bullion, said customer numbers have more than doubled in the past year. He noted that retail investors, banks, and wealthy families are increasingly turning to gold as a safeguard against global instability. “Most of our clients are long-term holders,” Gregersen said, adding that many keep their gold stored for over four years. “Gold may fall eventually, but with current conditions, it’s likely to stay on an upward path for at least five years,” he predicted.
The shine could fade if rates rise again
Experts warn that gold’s rally could falter if global conditions change. OCBC’s Wong said prices may fall if interest rates climb or political tensions ease. In April, gold dropped about 6% after Trump backed away from firing Federal Reserve Chair Jerome Powell. “Gold is a hedge against uncertainty, but that hedge can quickly unwind,” Wong said.
In 2022, gold plunged from $2,000 to $1,600 an ounce after the Federal Reserve raised rates to control post-pandemic inflation, Heng noted. A sudden spike in inflation could again push the Fed to act, putting pressure on gold prices.
Trump’s battle with the Fed adds to the chaos
Wong said expectations of lower interest rates are driving gold’s current strength. Yet Trump’s public attacks on the Federal Reserve are shaking investor confidence. He has accused Jerome Powell of moving too slowly and even tried to remove Fed Governor Lisa Cook. Wong warned that such interference “undermines trust in the Fed’s ability to act as a credible inflation-fighting authority.” In a world increasingly shaped by political conflict and market fear, he added, gold’s role as a safe haven “has never been more vital.”
