- Value has doubled in two years
- Price has ‘psychological significance’
- Gold-backed ETFs at new high
Gold prices surged past $4,000 per ounce to a new high on Wednesday, as investors sought safety amid mounting economic and geopolitical uncertainty.
Spot gold rose 0.7 percent to $4,011 per ounce by 03:00 GMT. US gold futures for December delivery gained 0.7 percent to $4,033.40 per ounce.
Returns on bullion, which traded below $2,000 two years ago, have outpaced equities this century, Bloomberg reported.
Gold has rallied more than 50 percent this year, driven by uncertainties over global trade and US fiscal stability.
Central banks continue to buy gold at a strong pace due to escalating geopolitical risks.
“Gold has done it. Gold has reached the long-awaited $4,000 per ounce mark, a level that carries psychological and symbolic significance,” Pepperstone market strategist Ahmad Assiri said in a client note.
The rally is far from a speculative surge detached from fundamentals; rather, it stems from a rare convergence of macroeconomic forces, he said.
Assiri said the $4,000 level was a fast-reached milestone, and it is a test of broader market sentiment, adding that some profit-taking and tactical positioning are expected as traders assess the sustainability of current momentum.
“Gold breaking $4,000 isn’t just about fear — it’s about reallocation,” Charu Chanana, a strategist at Saxo Capital Markets, was quoted as saying by Bloomberg.
Goldman Sachs has already raised its forecast for gold prices to $4,900 by December 2026.
The US investment bank projected central bank gold purchases to average 80 metric tonnes in 2025 and 70 tonnes in 2026.
Emerging-market central banks are likely to continue diversifying their reserves into gold, Goldman said.
Global physically backed gold exchange-traded funds (ETFs) recorded their largest monthly inflow in September, resulting in the strongest quarter on record of $26 billion, the World Gold Council (WGC) said in a report this week.
Assets under management in global gold ETFs reached a record $472 billion, a 23 percent rise quarter on quarter by the end of the third quarter of 2025.
Gold trading volumes surged in September, averaging $388 billion per day, a 34 percent month-on-month increase, supported by dollar hedging, inflation concerns, geopolitical tensions, and US government risks, including the shutdown in early October, the WGC said.
On the regional front, Vijay Valecha, chief investment officer at Dubai-based Century Financial, said Saudi Arabia’s gold imports from Switzerland fell to 1.9 tonnes in August, down 31 percent month on month and 36 percent year on year.
The key driver was the impact of record-high gold prices, which weighed heavily on jewellery demand in a price-sensitive market.
The UAE showed a mixed pattern in August, as gold imports from Switzerland rose month on month from July but remained well below year-earlier levels, due to weak consumer and tourist demand as gold averaged above $3,500 in August, he added.
“The rally is being driven by heightened odds of further interest-rate cuts later this year,” Valecha said. “Additionally, increasing trade uncertainty from a fresh round of tariffs by Donald Trump on imported goods, such as drugs, trucks and furniture.”
