Gold Hits Historic $4,000 Amid Global Uncertainty

Published: 08 October 2025. The English Chronicle Online.

Gold prices surged above $4,000 (£2,980) per ounce for the first time in history, as investors flocked to the precious metal amid global political and economic turbulence. The spot price of gold, which reflects real-time market value and serves as the global benchmark, reached $4,031.54 at 8 a.m. in London on Wednesday, climbing 1.2% during early trading.

This rally marks the largest surge for gold since the 1970s, a period similarly characterised by high inflation, significant government spending, and weakened confidence in currencies. The current rise has been driven by multiple factors, including the ongoing US government shutdown, political uncertainty in France and Japan, and lingering fears over global trade disruptions. The increase represents a more than 50% rise in gold prices in 2025 alone, following gains of 27% in 2024 and 13% in 2023, highlighting a sustained upward trend fueled by geopolitical instability in regions such as the Middle East and Ukraine.

Ray Dalio, billionaire founder of Bridgewater Associates, compared the current economic environment to the early 1970s. Speaking at a US economic conference, Dalio emphasised gold’s role as a portfolio diversifier during periods of uncertainty. “Gold is a very excellent diversifier in the portfolio. If you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold … because it is one asset that does very well when the typical parts of the portfolio go down,” he said.

The price of gold futures, an indicator of market sentiment, surpassed $4,000 per ounce on Tuesday, trading above the spot price and signalling strong ongoing demand. Investors have been channeling funds into gold exchange-traded funds (ETFs), with inflows reaching $64 billion so far this year, including a record $17.3 billion in September alone. Central banks, notably including China’s central bank, have also actively purchased gold, reinforcing expectations that the rally will continue.

Ewa Manthey, a commodities strategist at ING, described the surge as historic, noting that gold has doubled in value in less than two years. “Looking ahead, central banks are still buying … Trump’s trade war is still pressing on, geopolitical risks remain elevated, and ETF holdings continue to expand while expectations of more Fed rate cuts intensify. All of this suggests that gold has still further room to run,” she said.

Historically, investors have sought gold during periods of US government shutdowns, viewing it as a reliable safe haven. While some analysts caution that the rally could slow if the shutdown resolves sooner than expected, ongoing expectations of US interest rate cuts, trade tensions, and broader geopolitical instability are likely to sustain demand.

As global uncertainties mount, gold continues to attract investors seeking stability and long-term security, solidifying its status as a key refuge for capital in turbulent times.