Gold Surges Past $4,000 for First Time

ISLAMABAD: Gold soared above $4,000 an ounce for the first time on Wednesday, extending a historic rally as investors sought refuge from mounting global economic and geopolitical risks and bet on imminent U.S. interest rate cuts.

Spot gold climbed as much as 1.4% to $4,039.10 per ounce, while U.S. gold futures for December delivery rose 1.4% to $4,061.80. Silver also joined the rally, gaining 2% to $48.76 per ounce, just shy of its all-time high.

The precious metal has surged about 54% year-to-date, after a 27% gain in 2024, making it one of the best-performing assets of 2025. Gold’s rally has outpaced global equities, bitcoin, and left the U.S. dollar and crude oil trailing.

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A mix of factors is fueling the surge, including expectations of Federal Reserve rate cuts, persistent political and economic uncertainty, robust central bank buying, renewed inflows into gold-backed exchange-traded funds, and a weaker dollar. The ongoing U.S. government shutdown, now in its eighth day, has delayed key economic data releases, forcing investors to rely on private sources to gauge the Fed’s next move.

“Background factors are much the same as before, in terms of geopolitical uncertainty, with the added spice of the government shutdown,” said Rhona O’Connell, analyst at StoneX. “There will be a degree of risk mitigation via bullion.”

Markets are now pricing in a 25-basis-point rate cut at the Fed’s upcoming meeting, with another reduction expected in December. Global crises, including the Middle East conflict, the war in Ukraine, and political turmoil in France and Japan, have further amplified demand for safe-haven assets.

Renewed accumulation of developed-market gold ETFs for the first time in five years is also supporting the rally, according to Deutsche Bank’s Michael Hsueh. Analysts expect strong ETF inflows, continued central bank buying, and lower U.S. rates to keep gold prices elevated into 2026, prompting Goldman Sachs and UBS to raise their forecasts.

“We had expected gold to reach the $4,000 level closer to the end of the year, but the direction of travel remains consistent with our broader outlook,” said Nitesh Shah, commodities strategist at WisdomTree, who reiterated a forecast for gold to hit $4,530 an ounce by the end of the third quarter of 2026.