Gold is rising at a record pace: what it means for investors
8 October 12:43
The price of gold on the spot market exceeded $4,000 per ounce for the first time in history. The rapid growth was caused by concerns about the state of the US economy and a possible temporary government shutdown. This was reported by "Komersant Ukrainian" with reference to Bloomberg.
For gold, this is an important milestone: two years ago, its price was below $2,000, and now the metal’s yield exceeds the performance of stocks in this century.
The key drivers of the rise include geopolitical tensions, concerns about the independence of the US Federal Reserve, and fiscal stability issues. In addition, central banks around the world are actively buying gold, increasing their reserves.
“Breaking through the $4,000 mark is not only a reaction to fear, but also a signal of capital redistribution,” said Charu Chanana, an analyst at Saxo Capital Markets.
Demand for gold exceeds stocks
Investors are looking for protection from possible market shocks after the financial disputes in Washington. The start of the Fed’s monetary easing cycle also supported gold, as the metal does not earn interest.
This led to a record inflow of funds into gold-backed exchange-traded funds (ETFs) in September, the largest in three years.
Gold on the spot market rose 1.3% to $4,037.10 an ounce, and as of 14:02 in Singapore was trading at $4,028.13.
Historical jumps in gold prices
The rise in the gold price usually reflects economic and political stress.
After the global financial crisis, the metal exceeded $1,000 per ounce, during the COVID pandemic – $2,000, and in 2023, during the Trump administration’s tariff policy – $3,000.
Today, gold has surpassed $4,000 amid US President Donald Trump’s criticism of the Fed and attempts to influence its leadership, which has become a serious test of the central bank’s independence.
Demand for gold ETFs
In September, the volume of gold-backed funds rose to a record high over the past three years. The Fed’s rate-cutting policy is expected to create a “golden situation” for the metal, which serves as a hedge against inflation.
Analysts at Macquarie Bank predict that gold will reach a cyclical peak during periods of the greatest uncertainty about the Fed’s independence.
Central banks and gold
Central banks have been actively accumulating gold since the global financial crisis, especially after Russia froze its foreign exchange reserves in 2022. This has pushed regulators to diversify their reserves and increased the attractiveness of gold in times of high inflation and geopolitical tensions.
Goldman Sachs has raised its December 2026 gold price forecast to $4,900 per ounce, up from its previous forecast of $4,300.
Among other precious metals, silver rose to $48.94 an ounce, the highest since April 2011, while platinum and palladium also rose. The Bloomberg Dollar Spot index increased by 0.2%.
