“Gold price exceeds four thousand dollars per ounce for the first time – NYTThe price of gold has risen above four thousand dollars per ounce for the first time, increasing by more than 50 percent this
year. Investors are seeking safe-haven assets due to political turmoil and uncertainty, as well as the weakening dollar and US
government bonds.
”, — write: unn.ua
DetailsInvestors, financial managers, and central banks around the world have piled into gold this year, and on Tuesday, its price rose above four thousand dollars per ounce for the first time. The precious metal has surged by more than 50 percent this year, setting a series of records in the process.
Analysts warned that there are unpleasant echoes of that past surge today, attributing the recent rise in gold prices to demand from investors seeking to divest from U.S. assets during a period of political turmoil and uncertainty, underscored by the government shutdown. The rise in gold prices also reflects a strong undercurrent of anxiety among investors, even as stocks have repeatedly set records, giving Wall Street a bullish appearance.
Gold is also attracting buyers as other traditional currency havens, such as the dollar and U.S. government bonds, have lost some of their appeal. The Federal Reserve is expected to continue lowering interest rates, which could further weaken the dollar, which has already fallen by about 10 percent this year. Concerns about rising debt and deficits have overshadowed America’s creditworthiness, which no longer holds the highest credit rating from any major agency after Moody’s downgrade this year.
Another popular currency haven, the Japanese yen, took a hit on Monday after the unexpected election of a long-serving leader of the Liberal Democratic Party, who advocated for spending, tax cuts, and lower interest rates. Later on Monday, the sudden resignation of France’s prime minister, less than 24 hours after he formed his cabinet, further destabilized the geopolitical outlook and dragged the euro down, forcing investors to turn to the perceived safety of gold.
Gold price exceeds $3900 per ounce for the first time in history06.10.25, 09:57 • 3572 views
The rise in gold prices has largely been driven by uncertainty, said Ryan McIntyre, senior managing partner at Sprott, an investment management firm specializing in precious metals.
“Whether it’s geopolitical, economic, or the interest rate cycle, it’s permeating people’s minds,” he said.
Exchange-traded funds that buy gold acquired more than 100 metric tons of the precious metal in September, according to Goldman Sachs. The bank’s analysts raised their price forecast on Monday, estimating that gold will reach $4,900 per ounce by the end of next year.
According to Barclays analysts, the volume of cash flows into the largest gold-backed fund in the last two weeks has been exceeded only once in the last 20 years.
The rise in gold prices has also contributed to the growth of shares of companies that mine the metal. An index tracking gold mining companies on the New York Stock Exchange has more than doubled this year.
Some central banks have been shifting from dollar-denominated assets to gold for several years, but analysts note that the recent shift by private investors has added momentum. Gold has risen sharply in price in major currencies such as the yen, euro, and British pound.
“It’s really becoming more of a strategic reserve asset, both for sovereigns and institutions,” Mr. McIntyre said. “People are using it as a diversifier.”
The government shutdown is the latest factor driving investors to gold. Market observers are forced to do without important economic data released by government agencies, raising concerns and confusion about the state of the economy, especially after recent signs of weakness in the labor market.
“Continued labor market weakness increases the risk of recession or stagflation, supporting gold allocation,” State Street Investment Management analysts note.
RecallAccording to Fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the rising price of gold is a signal for the modern fintech market that although technology can make finance more convenient, trust is based on values proven over centuries. And geopolitical instability further enhances the importance of gold in the international market.
“Wars, trade conflicts, unpredictable decisions of world leaders – all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So the jump in the value of gold is not just a financial event, it is a marker of investor confidence in the modern economy,” Olena Sosedka summarized.
She also added that the rising price of gold only means that investors are preparing for a weakening dollar. A weaker dollar makes gold cheaper for international buyers, creating a powerful incentive for its price to rise.