Gold Prices Hit Record $4,000 Amid Global Political and Economic Turmoil
Gold prices soared to a new record high in Asian trading on Wednesday, breaking above $4,000 per ounce for the first time. The surge came as investors rushed to safe-haven assets amid growing political and economic uncertainty worldwide.
Expectations of further interest rate cuts by the U.S. Federal Reserve also lifted sentiment, with markets watching upcoming speeches from several Fed officials later this week.
Spot gold climbed 0.6% to a record $4,010.84 per ounce, while December gold futures rose 0.7% to a peak of $4,033.27. Futures had already crossed the $4,000 mark on Tuesday.
Global Unrest Boosts Safe-Haven Demand
Analysts at ANZ said that markets still expect a 25-basis-point rate cut this month, a move that could further support gold. They added that political turmoil in France and Japan has intensified fiscal concerns, helping fuel the rally.
Rising worries about overvalued equity markets have also triggered a shift into gold-backed ETFs, as investors seek safer ways to diversify their portfolios. ANZ noted that uncertainty surrounding the U.S. economy is likely to keep gold demand strong.
Shutdown, Global Politics Drive Investor Anxiety
Demand for bullion was further boosted by fears that the U.S. government shutdown could extend into a second week. Political gridlock in Congress showed little sign of easing, despite mediation efforts from President Donald Trump.
While shutdowns have typically had limited economic impact, White House officials warned that this time may be different due to delays in key data and funding disruptions.
In France, a fresh political crisis added to global risk aversion after Prime Minister Sebastien Lecornu resigned just hours after unveiling his cabinet. Meanwhile, in Japan, investor unease grew following the election of Sanae Takaichi as the new LDP leader. Takaichi’s plans for expanded fiscal spending and potential opposition to Bank of Japan rate hikes raised questions over Japan’s fiscal stability.
Focus Turns to Fed Speeches and Meeting Minutes
With official economic reports delayed by the U.S. shutdown, markets have shifted their focus to private data and Fed communications. Private jobs data last week showed slower employment growth, reinforcing expectations for more rate cuts.
Minutes from the Fed’s September meeting are due Wednesday and will provide more insight into the recent 25 bps rate cut. According to CME FedWatch, traders are pricing in a nearly 100% chance of another cut later in October. Fed Chair Jerome Powell is set to speak on Thursday.
Other Precious Metals Rally; Copper Slips
Other precious metals also rallied. Spot platinum rose 2.1% to $1,661.36/oz, and silver gained 1.4% to $48.50/oz, both hitting decade highs.
In contrast, copper prices retreated slightly after recent gains. LME copper futures fell 0.2% to $10,713.45 per ton, while COMEX copper dipped 0.1% to $5.0878 per pound. The metal remains supported by fears of a supply shortage following an extended production outage at Indonesia’s Grasberg mine after a fatal accident in September.
