Gold Price Hits Historic High Amidst Global Uncertainty

Mon Oct 20 2025 22:56:15 GMT+0300 (Eastern European Summer Time)

Gold surges past $4,000 an ounce as concerns over economic and political instability drive investors towards safe haven assets.

The price of gold has reached a record $4,000 an ounce, marking its largest rally since the 1970s. This increase reflects investor concern over global economic and political uncertainty, compounded by the ongoing U.S. government shutdown. The demand for gold as a safe haven asset has surged, with significant investments flowing into gold-backed financial products, prompting analysts to highlight a potential continued rise in gold prices amid market volatility.

The price of gold has hit a record high of more than $4,000 (£2,985) an ounce as investors look for safe places to put their money over concerns about economic and political uncertainty around the world.

Gold has seen its biggest rally since the 1970s, rising by around a third since April when US President Donald Trump announced tariffs which have upset global trade.

Analysts say another issue worrying investors is delays to the release of key economic data due to the US government shutdown, as it enters its second week.

Gold is seen as a so-called safe haven investment, which is expected to retain or increase its value during times of market turbulence or economic downturns.

The price of spot gold - the real-time market value of the precious metal for immediate delivery - rose to more than $4,036 an ounce on Wednesday afternoon in Asia.

Gold futures - which serve as a gauge of market sentiment - reached the same level on 7 October. Futures are agreements to buy or sell the asset at a pre-determined date in the future.

The US government shutdown, triggered by repeated impasses over public spending, is a tailwind for gold prices, said OCBC's Christopher Wong, a rates strategist.

Investors have previously turned to gold during US government shutdowns, as seen in Trump's first term when gold rose by nearly 4% during a month-long shutdown.

However, gold prices could fall if the shutdown ends more quickly than some investors expect, noted Wong.

Gold’s “unprecedented rally” this past month has surpassed analysts’ expectations, according to UOB bank’s head of markets strategy, Heng Koon How.

This surge is also linked to the weakening US dollar and increased participation from retail investors.

A record $64bn has been invested in gold ETFs so far this year, according to the World Gold Council.

Gregor Gregerson, the founder of Silver Bullion, has seen his customer base double within a year. Many clients are long-term holders, viewing gold as a safeguard against global economic uncertainty.

Gold prices can fall, however, if interest rates rise or geopolitical tensions ease. Historical trends show that spikes in gold prices can quickly reverse due to shifts in the economic landscape.

Wong emphasizes that gold's role as a hedge against uncertainty gains renewed importance in the current environment, especially amid pressure on the Federal Reserve regarding interest rates.