Gold surges past $3,900 for the first time as investors seek safety amid global uncertainty

"Gold prices have surged to fresh record highs, breaching $3,900 an ounce for the first time as investors sought refuge from global economic and political uncertainty. The precious metal traded at $3,956.19 per ounce in late deals, extending this year's gain to almost 50 per cent. The rally has been fuelled by expectations of lower US interest rates, geopolitical tensions and heavy buying by central banks seeking to diversify reserves."

"Investment bank UBS expects gold to climb further, forecasting a year-end price of $4,200 per ounce. Meanwhile, Deutsche Bank has lifted its 2026 forecast for gold from $3,700 to $4,000, and raised its silver outlook from $40 to $45 per ounce, citing persistent monetary easing and inflation concerns. Goldman Sachs analysts have gone further still, predicting prices could hit $5,000 next year if political pressure on the US Federal Reserve intensifies."

"Analysts said gold's remarkable rise reflected deepening investor anxiety about the outlook for growth and the stability of the US economy. Fears surrounding the American government shutdown, combined with speculation that the Federal Reserve will deliver further rate cuts, have reinforced demand for assets viewed as safe stores of value. Gold typically moves inversely to interest rates, as higher yields make non-income-producing assets such as gold less attractive."

Gold has surged to record levels, surpassing $3,900 per ounce and trading near $3,956, marking almost a 50% gain this year. The rise has been driven by expectations of lower US interest rates, geopolitical tensions and substantial central bank purchases aimed at diversifying reserves. Growing investor anxiety about economic growth and concerns over US political stability, including a potential government shutdown, have increased demand for safe-haven assets. Falling bond yields have made gold more attractive to institutional investors and sovereign funds. Major banks have raised forecasts, and precious-metals producers on stock markets have benefited from the rally.

Read at Business Matters