Gold Prices Hit Record High Above $4,000 Amid Global Economic and Political Turmoil
The price of gold has soared to an all-time high of over $4,000 (£2,985) per ounce, as investors worldwide rush toward safe-haven assets amid escalating economic and political uncertainty. The yellow metal has surged by nearly one-third since April, marking its strongest rally since the 1970s.
This record-breaking rise comes in the wake of U.S. President Donald Trump’s tariff announcements, which have rattled global markets and reignited concerns over international trade stability. Adding to investor anxiety, the U.S. government shutdown, now stretching into its second week, has delayed the release of key economic data, further fueling market unease.
A Surge Driven by Uncertainty
Gold has long been considered a safe-haven investment, sought after in times of financial turmoil. It is viewed as a stable store of value that tends to perform well when confidence in traditional markets wanes.
On Wednesday afternoon in Asia, spot gold prices — representing the current market value for immediate delivery — climbed past $4,036 per ounce. Meanwhile, gold futures, which reflect investor expectations of future prices, reached similar levels on October 7.
According to Christopher Wong, rates strategist at OCBC Bank, the ongoing U.S. government shutdown has been a major “tailwind for gold prices.” Historically, gold tends to rise during such shutdowns — it gained nearly 4% during the month-long government halt in Trump’s first term.
However, Wong cautions that if the shutdown resolves sooner than expected, gold prices could pull back in the short term.
Analysts Call It an “Unprecedented Rally”
Heng Koon How, Head of Markets Strategy at UOB Bank, described the surge as an “unprecedented rally,” noting that prices have exceeded nearly all forecasts. He attributes the jump to a weaker U.S. dollar and increased participation from retail investors — smaller, non-professional buyers who view gold as a shield against economic instability.
Beyond short-term drivers, analysts say the deeper strength behind gold’s rise lies in the buying habits of central banks. Governments around the world have been steadily increasing their gold reserves as a strategic hedge against overreliance on the U.S. dollar and U.S. Treasury bonds.
Since 2022, central banks have purchased more than 1,000 tonnes of gold annually, compared to an average of 481 tonnes per year from 2010 to 2021. Last year, Poland, Turkey, India, Azerbaijan, and China were among the top buyers.
The Rise of Gold ETFs and Institutional Interest
Not all investors are stockpiling physical gold. Many are turning to exchange-traded funds (ETFs) — investment vehicles backed by gold reserves that allow investors to gain exposure without holding the metal directly.
According to the World Gold Council, a record $64 billion has flowed into gold ETFs so far this year, underscoring growing investor appetite for the commodity.
In Singapore, Gregor Gregersen, founder of Silver Bullion, a precious metals dealer and storage provider, said his company’s customer base has more than doubled over the past year.
“Retail investors, banks, and wealthy families are increasingly viewing gold as a safeguard against global uncertainty,” Gregersen explained. “Most of our clients are long-term holders — many store their gold for over four years.”
While acknowledging that “gold will fall at some point,” he believes the metal’s long-term outlook remains bullish. “Given the current economic environment, I expect gold to stay on an upward trend for at least the next five years,” he added.
Risks That Could Slow Gold’s Momentum
Despite the impressive rally, analysts warn that gold is not immune to declines.
If interest rates rise or geopolitical tensions ease, gold could lose its appeal, Wong noted. In April, for example, prices fell by nearly 6% after President Trump decided not to dismiss Federal Reserve Chair Jerome Powell, signaling greater policy stability.
“Gold is often seen as a hedge against uncertainty,” Wong said. “But when uncertainty fades, that hedge can be unwound.”
A similar scenario unfolded in 2022, when gold prices dropped from $2,000 to $1,600 per ounce after the U.S. Federal Reserve aggressively raised interest rates to fight post-pandemic inflation.
UOB’s Heng warned that a resurgence in inflation could again threaten gold’s rally, as it may push the Fed to hike rates. Conversely, current expectations that the Fed will cut rates have helped drive the recent surge, as lower interest rates typically make non-yielding assets like gold more attractive.
Political Pressure on the Federal Reserve
The political landscape in Washington is adding yet another layer of uncertainty. President Trump has publicly intensified pressure on the Federal Reserve, criticizing Powell for not cutting rates fast enough and even attempting to fire Fed Governor Lisa Cook.
According to Wong, this political interference risks undermining confidence in the Fed’s independence as a credible, inflation-targeting central bank.
“In such an environment,” he said, “gold’s role as a hedge against uncertainty gains renewed importance.”
What’s Next for Gold?
While no one can predict how long the current rally will last, many analysts agree that gold’s record-breaking run reflects deep-rooted fears about global stability — from trade wars and government shutdowns to rising inflation and currency volatility.
As investors continue to seek protection from economic shocks, gold remains one of the few assets that transcends borders, politics, and financial systems.
With central banks stockpiling reserves, retail investors buying in record numbers, and the global economy facing persistent headwinds, gold’s long-term momentum shows few signs of fading.
Whether it maintains its spot above $4,000 an ounce or experiences short-term corrections, one thing is clear: gold has once again proven its timeless reputation as the world’s ultimate safe haven.