Gold price hits record for 40th time this year

Ben Graham · Outubro 8

Gold continued its record-setting rally, surpassing the $4,000 level for the first time on Wednesday, as broader geopolitical and economic uncertainty firmed investor demand for the safe-haven metal.

Spot gold roared to $4,049.56 per ounce for its 40th record high this year. By 10:30 a.m. ET, it traded 1.5% higher at $4,044.78 per ounce.

US gold futures for December delivery also rose 1.5% to an all-time best of $4.072 per ounce.

Wednesday’s rally marks a significant milestone for bullion, as its price has now officially doubled from $2,000 seen two years ago. Since the turn of the century, the metal has well outperformed global equities, with a return exceeding 1,200%.

Gold’s value typically tracks broader economic and political stresses. The metal breached $1,000 an ounce in the aftermath of the global financial crisis, $2,000 during the Covid pandemic, and $3,000 as the Trump administration’s tariff plans washed over global markets in March.

Now, the yellow metal has broken past $4,000 against the backdrop of, among other things, political turbulence around the globe as well as uncertainties over US fiscal stability.

Structural shift

With the latest rally, bullion has now risen by more than 50% this year, backstopped by rising demand for the safe-haven metal. This is evident in the pace at which central banks are accumulating gold despite sky-high prices,

Elevated central bank buying is a “structural shift in reserve management behavior, and we do not expect a near-term reversal,” Lina Thomas, a commodities strategist at Goldman Sachs, wrote in a September note.

In light of its strong performance, Goldman analysts this week raised their gold forecast for December 2026 to $4,900 an ounce, up from $4,300 previously.

The pile-on into gold took on extra urgency over the past week as investors sought protection from potential market shocks following the government funding impasse in Washington. The start of a US monetary easing cycle has also been a boon for gold, which yields no interest.

Investors have responded by doubling down on gold-backed exchange-traded funds, which saw their biggest monthly inflow in more than three years in September.

“Gold breaking $4,000 isn’t just about fear — it’s about reallocation,” said Charu Chanana, a strategist at Saxo Capital Markets.

“With economic data on pause and rate cuts on the horizon, real yields are easing, while AI-heavy equities look stretched. Central banks built the base for this rally, but retail and ETFs are now driving the next leg.”

Fed factor

Another catalyst driving up gold prices is an uncertain future facing the US Federal Reserve and its leadership, which have been pressured by President Donald Trump to be aggressive in lowering rates.

Analysts believe a pliant Fed that would lower rates and spur higher inflation could set up a Goldilocks situation for gold. The metal is seen as an inflation hedge but is also weighed down by high borrowing costs, which make cash or bonds more appealing.

“We expect gold to reach a cyclical peak when there is greatest market concern about the outlook for Fed independence,” Macquarie Bank wrote in a Sept. 30 note. “In the event, however, that a compromised Fed were to make clear policy errors, gold’s performance should of course be even stronger.”

On Tuesday, Billionaire Ray Dalio said that gold is “certainly” more of a safe haven than the dollar and that the record-setting rally echoes the 1970s. “Gold is a very excellent diversifier of the portfolio,” Dalio said during a panel discussion with Bloomberg at the Greenwich Economic Forum.

Dalio echoes Griffin in seeing gold as safer than US dollar

“So if you were to look at just from the strategic asset allocation mix perspective, you would probably have as the optimal mix something like 15% of your portfolio in gold.”

(With files from Bloomberg)

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