Hong Kong: Gold surged past the $4,000 mark for the first time on Wednesday, as mounting concerns over the US government shutdown, global political instability, and expectations of Federal Reserve rate cuts drove investors toward the traditional safe haven.
Spot gold climbed as high as $4,006.68 per ounce, extending a powerful rally that has already lifted prices by more than 50 percent since the start of the year.
The surge comes even as the US dollar has strengthened against most major currencies in recent days. The latest upswing follows growing unease in financial markets. The US government shutdown, now stretching into its second week, has delayed the release of key economic data, including jobs figures, complicating the Federal Reserve’s outlook as it weighs further rate cuts.
“The rapid rise in gold prices has been supported by rising inflows into exchange-traded funds and strong central bank buying, including robust demand from China,” said Taylor Nugent, economist at National Australia Bank.
Analysts say investors have been steadily increasing their exposure to gold throughout 2025, driven by a series of crises ranging from the global economic slowdown and ongoing trade tensions to renewed geopolitical risks.
Political instability in France added another layer of anxiety this week. The resignation of France’s prime minister and calls from a former premier urging President Emmanuel Macron to step down and call early elections have rattled European markets.
The uncertainty in Europe, coupled with persistent geopolitical flashpoints elsewhere, has reinforced gold’s appeal as a hedge against volatility. While gold glittered, equity markets across Asia were subdued. Traders appeared increasingly wary that the rapid, tech-driven surge that sent some global indexes to record highs may be losing steam, raising fears of an emerging asset bubble.
Hong Kong and Taipei were among the biggest losers on Wednesday, while Sydney and Singapore also declined. Tokyo edged higher, supported by expectations that newly elected conservative leader Sanae Takaichi will push for more fiscal stimulus and continued monetary easing. Wellington, Manila, and Jakarta also posted modest gains.
Gold’s upward momentum has been reinforced by heavy inflows into bullion-backed exchange-traded funds and consistent central bank purchases, especially from emerging economies.
Analysts say that with rate cuts expected from the Fed and inflation still elevated in many countries, gold could continue to climb in the months ahead. Silver was also nearing a record high, trading within a few dollars of its peak.
