Gold clears $4,000 in historic first
By Abigail Townsend
Date: Wednesday 08 Oct 2025
(Sharecast News) - Gold prices have breached $4,000 for the first time, as widespread political and economic risk continue to fuel a flight to safety.
The safe haven asset has soared this year, as investors react to geopolitical tension, Donald Trump's aggressive trade war and global economic uncertainty, including inflation and mounting debt.
Central banks have also been stockpiling the precious metal as they look to diversify away from the dollar, which has been undermined by the US president's erratic policies.
Prices have now soared by more than 50% this year and on Wednesday they exceeded $4,000 a troy ounce for the first time, at $4,035.
The rally has been further fuelled in recent days by the ongoing federal shutdown in the US.
Ewa Manthey, commodities strategy at ING, said: "The shutdown has delayed key payroll data, further clouding an already uncertain economy outlook. With official data delayed, traders are relying on private reports for economic insight, while the central bank faces challenges in making monetary policy decisions.
"Policy uncertainty and growing bets on Federal Reserve easing are keeping safe-have demand strong."
Russ Mould, investment director at AJ Bell, said: "While stock markets have generally done well this year, gold has been a superstar.
"Traditionally, investors would load up on the shiny stuff when markets look gloomy, not when they're motoring ahead. It shows that investors are hedging their bets, particularly as there are growing concerns that euphoria around AI has gone too far and the bubble could burst at some point."
TD Securities said: "The yellow metal looks overbought, which suggests that anything that may question the speed of the Fed's easing, or an increase in volatility, could generate a robust downside. This could see a significant unwind of the late-summer rally in the relative near-term.
"While the metal could drop off its recent highs, we expect average price to reach a new record north of $4,400 in the first six months of the 2026, as the Fed eases into a higher inflation environment, official sector keeps buying and discretionary funds again position long."
The Fed, which cut interest rates by 25 basis points last month, is next due to meet on 29 October.
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