Gold Breaks $4,000 Barrier Amid Surge In Safe-Haven Demand

2025-10-12 05:01:04

(MENAFN- The Arabian Post)

Gold climbed past $4,000 per ounce for the first time, propelled by soaring investor demand for safer assets in the face of intensifying economic and political uncertainty. Spot gold reached about $4,011.18 per ounce, while U. S. gold futures for December delivery touched $4,033.40.

The rally reflects mounting expectations that the U. S. Federal Reserve will begin trimming rates, combined with a weakening dollar, heavy central bank purchases, and surging inflows into gold-backed exchange-traded funds. So far this year, gold has delivered a gain of roughly 50-53 percent-far outpacing many equity benchmarks.

A key immediate catalyst has been the ongoing U. S. government shutdown, now in its seventh day. The closure has stalled the release of critical economic data, leaving markets to lean on secondary indicators to gauge growth, inflation and the Fed's next moves. The dollar's softness further amplifies gold's attractiveness for foreign investors.

Central banks are playing a significant supporting role in the uptick. Nations such as China, Poland and Turkey have accelerated gold accumulation as they diversify foreign reserves and reduce reliance on U. S. dollar holdings. Institutional investors have also joined the rally, taking advantage of easy access through ETFs and platforms.

Traders are now pricing in a 25-basis point rate cut by the Fed this month, with the possibility of another in December. Analysts warn the market may face pullbacks near the $4,000 threshold given profit-taking pressures, but many remain bullish on momentum. Some forecasts now point toward $5,000 per ounce as a medium-term target.

Geopolitical tension has added further fuel. Volatility in global politics-ranging from unrest in Europe to policy shifts in Japan following the election of Prime Minister Sanae Takaichi-has amplified demand for bullion as a stability hedge.

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Silver, platinum and palladium also posted gains, with silver up over 1 percent to around $48.42 per ounce, platinum advancing roughly 2.5 percent, and palladium rising near 1.8 percent.

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