Gold prices soared past USD 4,000 per ounce for the first time on Wednesday, extending a record-breaking rally fueled by geopolitical tensions, expectations of U.S. interest rate cuts, and growing investor demand for safe-haven assets.

Spot gold climbed 1.7% to USD 4,050.24 per ounce, while U.S. gold futures for December delivery settled at USD 4,070.50. Silver also reached a record high, rising 3.2% to USD 49.39 per ounce after briefly touching USD 49.57.

Analysts attribute the rally to persistent macroeconomic instability and strong central bank buying. Gold, traditionally viewed as a store of value in uncertain times, has gained 54% so far in 2025, outpacing equities, Bitcoin, and crude oil. Silver has surged 71% this year, supported by tight supplies and strong investor inflows.

The U.S. government shutdown, ongoing conflicts in the Middle East and Ukraine, and political instability in major economies such as France and Japan have all strengthened demand for precious metals. According to the World Gold Council, inflows into gold exchange-traded funds reached USD 64 billion this year, including USD 17.3 billion in September alone.

Market analysts expect the Federal Reserve to cut interest rates by 25 basis points later this year, which could sustain gold’s momentum. Some forecasts suggest the metal may challenge the USD 5,000 mark in 2026 if current trends persist.

Platinum and palladium also rallied, rising to USD 1,666.47 and USD 1,449.69 respectively, marking multi-year highs for both metals.

Source: Reuters