Gold Smashes $4,000 Barrier in Historic Rally as Investors Seek Safe Haven

LONDON, Oct 8 – Gold prices surged into uncharted territory on Wednesday, blistering past the $4,000 per ounce milestone for the first time as investors gravitated towards the ultimate safe-haven asset amid a potent mix of global economic uncertainty and expectations of falling U.S. interest rates.

The landmark breach marks the crescendo of a record-breaking rally that has made gold one of the top-performing assets of 2025. Spot gold was last up 1.3% at $4,036.22 an ounce, while U.S. gold futures climbed to $4,058.

The rally has been breathtaking in its scale. Spot gold has soared 54% since the start of the year, following a 27% gain in 2024, significantly outpacing global equities and even Bitcoin.

“Background factors are much the same as before, in terms of geopolitical uncertainty, with the added spice of the U.S. government shutdown,” said Rhona O’Connell, an analyst at StoneX. She added that while the shutdown hasn’t hurt equities, it is driving investors to mitigate risk through bullion.

The rally is being fueled by a powerful confluence of factors: persistent geopolitical tensions in the Middle East and Ukraine, political turmoil in France and Japan, and sustained, massive purchases by central banks. A weaker U.S. dollar, which makes gold cheaper for foreign buyers, has provided an additional tailwind.

A critical shift has also occurred in investor behavior. After years of outflows, gold exchange-traded funds (ETFs) are seeing renewed, vigorous demand. According to the World Gold Council, global inflows into gold ETFs have hit $64 billion year-to-date, with a record $17.3 billion in September alone.

“Renewed accumulation of developed-market ETFs for the first time in five years is also among the factors boosting this rally,” noted Michael Hsueh, a precious metals analyst at Deutsche Bank.

The ongoing U.S. government shutdown, now in its eighth day, has further clouded the economic outlook by delaying key data, leaving markets to speculate on the Federal Reserve’s next move. Markets are currently betting on a 25-basis-point rate cut at the Fed’s upcoming meeting, with another expected in December.

This dovish outlook for interest rates, which reduces the opportunity cost of holding non-yielding bullion, is a primary pillar of the rally.

“We had expected gold to reach the $4,000 level closer to the end of the year, but the direction of travel remains consistent with our broader outlook,” said Nitesh Shah, commodities strategist at WisdomTree, which forecasts prices will hit $4,530 an ounce by the third quarter of 2026.

Analysts also point to a “fear of missing out” (FOMO) among investors as a driver of the parabolic move.

“One headwind for gold would be the Fed getting more hawkish, but for the time being, Trump wants to see lower U.S. interest rates and that should keep increasing the appeal of gold,” said UBS analyst Giovanni Staunovo.

Gold’s powerful momentum spilled over into other precious metals. Silver, often gold’s volatile sibling, jumped 2.4% to $48.97 an ounce, closing in on its own all-time high. Platinum and palladium also posted significant gains.

With major banks turning bullish and the fundamental drivers firmly in place, the historic rally for gold shows little sign of tarnishing.