Gold surged past the $4,000 per ounce level for the first time in history on Wednesday as investors sought refuge from mounting concerns over the U.S. economy and renewed uncertainty surrounding the Federal Reserve’s independence.
The precious metal climbed as high as $4,040.41 an ounce in early London trading and was last quoted at $4,039.48.
The latest milestone underscores bullion’s unrivalled strength as a store of value in times of financial stress.
Gold has gained more than 50 percent this year alone, outpacing equities and other traditional assets amid deepening worries over fiscal stability, trade tensions, and geopolitical risks.
Analysts said the rally reflects a shift in sentiment away from risk assets toward safe havens as political and economic pressures intensify in the United States.
The surge comes as investors digest the effects of Washington’s funding impasse and uncertainty over the Federal Reserve’s next policy moves. The start of a monetary easing cycle has added further momentum to gold’s advance, with lower real yields and expectations of future rate cuts encouraging a rotation from cash and bonds into tangible assets.
Bullion-backed exchange-traded funds (ETFs) recorded their largest monthly inflow in more than three years in September, signalling renewed retail and institutional demand.
Market strategist Charu Chanana of Saxo Capital Markets said gold’s record-breaking move is not driven solely by fear, but also by portfolio realignment. According to her, investors are reallocating capital amid stretched valuations in technology and artificial intelligence-driven equities, while easing yields have made gold increasingly attractive as a non-interest-bearing asset.
Central bank purchases have also reinforced the rally. Official sector accumulation, which accelerated after Western sanctions on Russia in 2022, has continued at an elevated pace as central banks diversify their reserves away from the U.S. dollar.
The International Monetary Fund data show a sustained rise in gold holdings since the global financial crisis, a structural shift in reserve management that analysts expect to persist for years.
The precious metal’s climb follows a historical pattern where major global shocks have propelled new price peaks.
Gold first broke $1,000 an ounce after the 2008 financial crisis, surpassed $2,000 during the pandemic, and crossed $3,000 amid global trade frictions in 2023. Its breach of $4,000 now comes as questions grow about U.S. governance, debt sustainability, and central bank autonomy.
Billionaire investor Ray Dalio described gold as a stronger safe haven than the dollar, noting that its role as a portfolio diversifier has become even more relevant in the current environment.
Dalio, founder of Bridgewater Associates, said an optimal strategic allocation could see investors hold up to 15 percent of their portfolios in gold to hedge against monetary and political uncertainty.
Goldman Sachs recently raised its forecast for the precious metal, projecting an average price of $4,900 an ounce by December 2026, up from $4,300, on expectations that central bank demand and rate easing will sustain the rally.
Analysts at Macquarie Bank said gold is likely to reach a cyclical peak when investor concern about the Fed’s independence is at its highest, warning that further policy missteps could drive prices even higher.
The metal’s gains have lifted the broader precious metals complex, with silver climbing as much as 2.3 percent to $48.93 an ounce, the highest since April 2011. Platinum and palladium also advanced, while the Bloomberg Dollar Spot Index was little changed.