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Gold prices surged to a record high of USD 3,977.44 an ounce, edging closer to the USD 4,000 milestone, as mounting political instability and economic uncertainty sent investors flocking to safe-haven assets.
The rally was driven by the ongoing U.S. government shutdown, which has entered its second week, hindering access to key economic data and complicating the Federal Reserve’s policy decisions. Market participants continue to anticipate a quarter-point rate cut this month, which typically boosts non-yielding assets like gold.
In Europe, France plunged into political crisis following Prime Minister Sebastien Lecornu’s resignation over failed budget negotiations, while Japan’s markets reacted nervously to the expected rise of Sanae Takaichi as prime minister. These developments have added to investor anxiety, prompting strong inflows into gold from both retail and institutional sources, especially in Europe and Japan.
Gold’s climb—about 50% so far this year—has also been supported by ongoing central bank purchases, including China’s 11-month buying streak, and robust demand for gold-backed ETFs. Goldman Sachs has raised its forecast for gold to $4,900 an ounce by December 2026, citing strong fundamentals. Financial strategists, like Invesco’s David Chao, recommend increasing gold exposure to hedge against further economic and geopolitical shocks.
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As of early afternoon in Singapore, spot gold was up slightly at USD 3,965.90 an ounce, poised for its strongest annual performance since 1979. Other precious metals also saw modest gains, with silver holding above USD 48, palladium up 1%, and platinum rising 0.5%.
