Gold hits $4,000 per ounce for the first time

NEW YORK,— Gold prices surged past $4,000 an ounce on Wednesday, setting a new record as investors moved into safe-haven assets amid growing economic and geopolitical risks.

One ounce equals 31.1035 grams, meaning a gram of gold is now valued at about $128.60.

Expectations that the U.S. Federal Reserve will continue cutting interest rates also fueled demand for the metal, according to market analysts.

Spot gold was trading 0.7 percent higher at $4,011.18 per ounce as of 0300 GMT, while U.S. gold futures for December delivery rose 0.7 percent to $4,033.40. The rally extends a dramatic run this year, with spot gold up 53 percent after gaining 27 percent in 2024.

“Confidence in this trade is extremely strong, and the market is already eyeing the next major milestone of $5,000,” said Tai Wong, an independent metals trader. “The Federal Reserve appears set to keep lowering rates, and longer-term drivers such as high debt levels, diversification of reserves, and a weaker dollar remain in place.”

Analysts say the rally reflects a combination of factors: expectations of lower U.S. borrowing costs, ongoing political and economic turmoil, central bank purchases, exchange-traded fund inflows, and a sliding dollar.

The U.S. government shutdown entered its seventh day on Tuesday, delaying the release of key economic data and leaving investors to rely on private surveys to gauge the outlook for Fed policy.

Traders are pricing in a quarter-point cut this month and another reduction in December.

“Uncertainty is once again pushing investors into gold,” said Tim Waterer, chief market analyst at KCM Trade. “Lower U.S. rates and the government shutdown both support prices, though profit-taking around $4,000 could bring some near-term volatility.”

Analysts say fear of missing out is adding fuel to the rally, while political instability overseas has further lifted demand. France’s government crisis and Japan’s political shake-up, including the election of Sanae Takaichi and the expectation of heavier deficit spending, have added to the momentum.

“The latest surge ties into what’s being called the ‘run it hot’ trade, where looser fiscal policy and lower rates encourage investors to seek assets like gold,” said Kyle Rodda of Capital.com.

Investment banks Goldman Sachs and UBS recently raised their forecasts for gold prices, citing expectations of steady central bank buying, strong ETF inflows, and prolonged interest rate cuts through 2026.

Other precious metals also gained. Spot silver climbed 1.3 percent to $48.42 per ounce, platinum advanced 2.5 percent to $1,658.40, and palladium added 1.8 percent to $1,361.89.

(With files from Reuters)