Gold Prices Soar Past $4,000 an Ounce Amid Global Economic Turbulence

The price of gold has hit a record high of more than $4,000 (£2,985) an ounce as investors look for safe places to put their money over concerns about economic and political uncertainty around the world.

Gold has seen its biggest rally since the 1970s, rising by around a third since April when US President Donald Trump announced tariffs which have upset global trade.

Analysts say another issue worrying investors is delays to the release of key economic data due to the US government shutdown, as it enters its second week.

Gold is seen as a safe haven investment, expected to retain or increase its value during times of market turbulence or economic downturns.

The price of spot gold - the real-time market value for immediate delivery - rose to more than $4,036 an ounce on Wednesday afternoon in Asia. Gold futures reached the same level on October 7. Such futures are agreements to buy or sell the asset at a determined date in the future.

The US government shutdown, driven by discord over public spending, is a tailwind for gold prices, says OCBC's Christopher Wong, the bank's rates strategist based in Singapore. Investors have historically turned to safe assets like gold during past government shutdowns.

Coincidentally, gold's 'unprecedented rally' outstripped analysts' predictions, highlighted by UOB's market strategy head Heng Koon How. Factors contributing to this surge include a weakening US dollar and a spike in retail investors purchasing gold.

Investments in gold ETFs, financial products backed by the precious metal, have reached a record $64 billion this year, according to the World Gold Council. Retail investors and banks have increasingly viewed gold as a safeguard against economic turbulence.

However, experts caution that the current gold price could drop if the shutdown resolves sooner than anticipated.

Gregor Gregersen, founder of Silver Bullion, noted a doubling of customer numbers over the past year, with many seeking long-term storage for gold. He expressed confidence in gold's upward trend over the next five years due to the economic climate.

While gold's price may experience fluctuations, such as a dip due to rising interest rates, the ongoing uncertainties reinforce its appeal as a stable investment. Additionally, some investors might sell their gold holdings if inflation surges, prompting realized volatility in the market.

As the White House continues to apply pressure on the Federal Reserve, public confidence in its inflation-targeting strategies could waver, further emphasizing gold's importance in hedging against uncertainty.