Gold Prices Soar to Historic $4,000 Threshold Amid Global Economic Uncertainty and US Government Shutdown

Gold prices have surged to nearly $4,000 an ounce, reaching an unprecedented high as several global factors converged to boost demand for the precious metal.

The bullion price climbed as high as $3,999.41 an ounce before slightly retreating, while December futures contracts in New York crossed the $4,000 threshold for the first time on Tuesday.

Multiple factors are driving this remarkable rally, including the ongoing US government shutdown which has now entered its second week. The shutdown has delayed the release of important economic data, creating uncertainty about the Federal Reserve's future interest rate decisions.

Investors are also closely watching for signs of excessive valuation in technology stocks, particularly those related to artificial intelligence, following a report on Oracle Corp.'s cloud margins. Adding to market anxiety are political upheavals in France and a leadership transition in Japan.

Gold has experienced a stunning 50% price increase this year, partly attributed to President Trump's policies affecting trade and geopolitical relations, which have weakened confidence in the US dollar. Central banks have been aggressive purchasers, while the Federal Reserve's recent rate cut has attracted more investors to gold-backed exchange-traded funds.

Goldman Sachs Group Inc. remains optimistic about gold's trajectory, raising its forecast for December 2026 to $4,900 an ounce from its previous projection of $4,300.

Bart Melek, head of commodities strategy at TD Securities, noted that "the ever-louder narratives surrounding de-dollarization and de-globalization" have strengthened demand for gold. However, he cautioned that "given the speed and magnitude of the rally since mid-August, there's a risk that speculators may be tempted to take some profits."

As of 8:49 a.m. in Singapore, spot gold had risen 0.3% to $3,996.11 an ounce, while the Bloomberg Dollar Spot Index remained stable. Silver showed slight gains after declining 1.4% in the previous session.

Billionaire Ray Dalio expressed his view that gold is "certainly" a more reliable safe haven than the dollar, comparing the current rally to the 1970s when gold prices surged during high inflation and economic instability. His comments followed Citadel founder Ken Griffin's observation that gold's rise reflected growing concerns about the US currency.

Hebe Chen, an analyst at Vantage Markets in Melbourne, commented: "The metal's climb to the $4,000 milestone reflects not only surging safe-haven demand, but also a deepening distrust in paper assets as fiscal risks and geopolitical tensions intensify. In the short term, a consolidation phase looks likely after such a relentless advance."