The price of gold has risen above $4,000 (£2,980) per ounce for the first time as investors continue to seek a safe place to put their money at a time of global political and economic uncertainty.
The spot price of gold – the real-time market value of gold and viewed as the global benchmark – reached $4,031.54 at 8am in London on Wednesday morning, after climbing 1.2% during early trading.
Gold is having its biggest rally since the 1970s and has risen higher in recent days as the US government shutdown enters its second week and amid political uncertainty in France and Japan.
The precious metal is viewed as a safe haven and tends to rise in price at times of uncertainty.
It has risen by more than 50% this year and has been climbing since April when the US president, Donald Trump, first announced the introduction of tariffs on imported goods, sparking fears of disruption to global trade.
This year’s increases came after rises of 27% in 2024 and 13% in 2023, at a time of global conflicts including in the Middle East and Ukraine.
Ray Dalio, the billionaire founder of one of the world’s largest hedge funds Bridgewater Associates, compared the current economic environment to the early 1970s, a time when inflation, significant government spending and high levels of debt had reduced confidence in currencies and other assets.
“It’s very much like the early 70s … where do you put your money in?” Dalio told a US economic conference on Tuesday, advising investors to keep some money in gold.
“Gold is a very excellent diversifier in the portfolio. If you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold … because it is one asset that does very well when the typical parts of the portfolio go down.”
The price of gold futures, which can be seen as a measure of sentiment, rose above $4,000 per ounce on Tuesday. Futures are now trading higher than the spot price, suggesting appetite for gold shows little sign of fading.
Investors have been putting money into gold exchange-traded funds (ETFs), with inflows hitting $64bn so far this year, according to the World Gold Council, with a record $17.3bn in September alone. Central banks, including China’s central bank, have also been buying gold, fuelling expectations that the gold rally will continue.
Ewa Manthey, a commodities strategist at the banking group ING, said: “Gold has staged a historic rally, doubling in less than two years.
“Looking ahead, central banks are still buying … Trump’s trade war is still pressing on, geopolitical risks remain elevated and ETF holdings continue to expand while expectations of more Fed rate cuts intensify. All of this suggests that gold has still further room to run.”
Investors have traditionally turned to gold and other safe haven assets during previous US government shutdowns, but some analysts predict the rally could slow if the shutdown ends more quickly than anticipated.
However, expectations of US interest rate cuts, along with tariffs, and continued concern over other geopolitical uncertainty may continue to make gold attractive to investors.
