Gold hits $4,000, silver reaches record high as investors seek safety amid economic uncertainty

Reuters reports that gold prices surged past $4,000 per ounce on Wednesday (October 8) for the first time, continuing a record-breaking rally driven by widespread geopolitical and economic uncertainty. Expectations of potential US interest rate cuts further fuelled investor demand for safe-haven assets.

Meanwhile, silver also reached a historic high on the same day, following gold’s upward trajectory, as investors rushed to buy precious metals.

Spot gold prices jumped 1.7% to $4,050.24 per ounce at 13:45 EST (17:45 GMT), while US gold futures for December delivery closed at $4,070.50 per ounce, up 1.7%. Silver prices soared 3.2% to $49.39 per ounce, after briefly hitting an all-time high of $49.57.

Matthew Piggott, Director of Gold and Silver at Metals Focus, stated that the strength of gold reflects the strong macroeconomic and geopolitical uncertainty, which is highly positive for safe-haven assets, especially amid concerns about traditional safe-haven assets.

Gold, traditionally viewed as a store of value during volatile times, has surged 54% since the beginning of the year, following a 27% increase in 2024. Gold is one of the best-performing assets of 2025, outperforming global stock market recoveries, Bitcoin, the US dollar’s decline, and falling oil prices.

Silver prices have surged 71% this year, benefiting from the same factors driving gold’s rally, including tightness in the spot market.

Suki Cooper, Head of Global Commodity Research at Standard Chartered Bank, noted:

“The metal markets remain tight, with rising lease rates and record high silver stocks at Comex. Amid strong seasonal demand from India, recent upward adjustments have been driven by significant capital inflows from ETP funds.”

The recovery in precious metal prices is driven by several factors, including expectations of US interest rate cuts, rising political and economic uncertainties, strong central bank buying, massive capital inflows from ETFs, and a weaker US dollar.

“With these factors likely to persist through 2026, we see no significant catalysts that would cause gold prices to decline meaningfully. Therefore, we expect gold to continue rising throughout the year, testing $5,000 per ounce,” Piggott added.

The US government shutdown entered its eighth day on Wednesday, causing delays in the release of key economic data and forcing investors to rely on non-government sources to assess the timing and scope of future Federal Reserve interest rate cuts.

Markets are evaluating a 0.25% rate cut at the next Fed meeting, with a similar rate reduction expected in December.

Federal Reserve officials agreed during their policy meeting that risks to the US labour market had increased enough to warrant a rate cut, though many remain cautious about persistently high inflation, according to the September 16-17 meeting minutes released on Wednesday.

Global crises, such as the conflict in the Middle East and the war in Ukraine, have spurred demand for gold bars, while political unrest in France and Japan has further boosted gold demand.

World Gold Council data reveals that global ETF gold funds have seen an influx of $64 billion since the beginning of the year, reaching a record high of $17.3 billion in September alone.

Analysts said that the "fear of missing out" (FOMO) has also driven prices higher.

On a technical level, the Relative Strength Index (RSI) for gold is at 87, indicating that the metal is overbought.

HSBC raised its 2025 average silver price forecast to $38.56 per ounce and $44.50 per ounce for 2026, citing higher gold price expectations, increased investor demand, and anticipated volatility in trading.

This momentum has spread to other precious metals, with platinum rising 3% to $1,666.47, its highest level since February 2013, and palladium climbing 8.4% to $1,449.69, its highest point in over two years.