Outlook Business Desk
Gold climbed above $4,000 per ounce for the first time, reaching a record level, with investor demand pushing prices up over 50% since the start of the year and nearly 12% in September alone, Richard Flax, chief investment officer at wealth manager Moneyfarm, told AFP.
Rising global tensions have made gold a trusted safe-haven investment, attracting investors amid crises such as the Russia-Ukraine war and the Israel-Gaza conflict. Geopolitical instability continues to drive demand for the precious metal worldwide.
Gold has gained additional support as the US dollar weakens amid expectations of Federal Reserve interest rate cuts and concerns over a possible government shutdown. Analysts say these developments make gold more attractive as an alternative investment.
Meanwhile, concerns about the Federal Reserve’s independence, sparked by US President Donald Trump’s criticism over slow interest rate cuts, have increased demand for gold. Investors view the metal as a hedge against uncertainty in US monetary policy.
Rising government debt in major economies, combined with uncertainty over trade tariffs, has driven increased gold purchases. Analysts note that these risks encourage investors to turn to gold for stability during periods of market volatility.
The World Gold Council also reported that global gold demand rose 3% year-on-year to 1,249 tonnes in the second quarter, with central banks buying at high levels amid ongoing economic and geopolitical uncertainty.
Gold-backed exchange-traded funds (ETF) are seeing record inflows, giving investors exposure without dealing in futures contracts. Analysts say strong sentiment and these inflows are helping maintain gold’s recent upward momentum.
In addition to gold, major stock markets and bitcoin have hit record highs. Investors are diversifying their portfolios globally, with bitcoin topping $126,000, reflecting strong liquidity and demand for multiple safe-haven assets.
Meanwhile, even as gold prices rise, demand for jewellery has dropped. The high-cost market has curtailed traditional retail purchases, highlighting that investor buying is driving the ongoing gold rally.