Gold surged past the $4,000 mark on Wednesday, reaching a new all-time high as investors turned to safe-haven assets amid deepening economic and geopolitical instability and growing expectations of further interest rate cuts by the US Federal Reserve.
Spot gold rose 0.9% to $4,017.16 per ounce by 04:42 GMT, while US gold futures for December delivery climbed 0.9% to $4,040. The metal has been one of 2025’s standout performers, gaining 53% so far this year after a 27% rise in 2024.
Investors Turn to Gold as Rate Cuts Loom
«There’s so much faith in this trade right now that the market will look for the next big round number, which is 5,000, with the Fed likely to continue to lower rates,» said independent metals trader Tai Wong.
He added that while a potential truce in the Middle East or Ukraine might slow the rally, structural factors such as rising debt, reserve diversification and a weaker dollar will continue to support gold in the medium term.
The rally has been fuelled by a combination of drivers, including expectations of interest rate cuts, persistent political and economic uncertainty, strong central bank purchases, inflows into gold-backed exchange-traded funds and a soft US dollar. The ongoing US government shutdown, now in its seventh day, has delayed key economic data releases, pushing investors to rely on secondary indicators to predict the Fed’s next move.
Market Eyes Further Rate Cuts
Markets are currently pricing in a 25-basis-point cut at this month’s Federal Reserve meeting, with another expected in December.
«Rising uncertainty levels tend to fuel gains in the gold price and we are seeing this theme play out again,» said Tim Waterer, Chief Market Analyst at KCM Trade.
He cautioned, however, that profit-taking near the $4,000 threshold could pose a short-term risk.
Political Turmoil Adds to Safe-Haven Demand
Analysts also pointed to a «fear of missing out» effect driving further gains, with political turbulence in France and Japan adding to demand. Kyle Rodda, analyst at Capital.com, noted that «the latest leg higher has been sparked by the election of Sanae Takaichi over the weekend and the prospect of deeper deficit spending in Japan,» describing it as part of the prevailing «run it hot» trade.
Strong inflows into gold ETFs, sustained central bank buying and the outlook for lower US interest rates are expected to keep prices buoyant into 2026. Goldman Sachs and UBS have both upgraded their gold price forecasts in response.
Kursiv also reports that just a day earlier, on Tuesday, spot gold climbed 0.4% to $3,974.09 per ounce.
