Khaberni - Gold shattered the $4,000 per ounce level on Wednesday, registering the highest level ever, driven by investors seeking a safe haven amidst escalating economic and geopolitical uncertainty, alongside expectations of further interest rate cuts by the Federal Reserve (U.S. central bank).
Gold rose in spot transactions by 1% to $4021.22 per ounce, while U.S. futures contracts for December delivery of gold increased by 0.5% to $4025 per ounce.
Gold is traditionally considered a store of value in times of instability.
Gold rose in spot transactions by 52% since the start of the year after rising 27% in 2024.
Independent metals trader Tai Wong stated, "There is so much confidence in this trade right now that the market will be looking forward to the next big number, which is $5000, with the Federal Reserve likely continuing to cut interest rates."
He added, "There will be some obstacles along the way such as a lasting truce in the Middle East or Ukraine, but it is unlikely that the fundamental drivers of trade and burgeoning huge debts and reserve diversification and the medium-term weakening dollar will change."
A variety of factors such as increased purchases by central banks and renewed interest in gold-backed exchange-traded funds, coupled with the weakening dollar and strong demand from individuals, have bolstered the rise of the yellow metal.
The U.S. government shutdown entered its seventh day on Tuesday.
This has led to the postponement of issuing major economic indicators, forcing investors to rely on secondary non-governmental data to predict the timing and extent of interest rate cuts.
Investors now expect a 25 basis point interest rate cut at this month's Federal Reserve meeting, and an additional 25 basis point cut in December.
Moreover, political unrest in France and Japan has also boosted demand for gold, which is considered a safe haven.
Analysts say that "fear of missing out" also boosts the rise.
Giovanni Stornovo, an analyst at UBS, said, "What we see now is that investors are buying gold, despite the high price, which further strengthens its movement."
In terms of other precious metals, silver rose in spot transactions by 0.5% to $48.03 per ounce, platinum increased by 2.2% to $1653.21, and palladium ascended by 1.3% to $1355.32 per ounce.
