Gold price hits record high amid global risks

NEW YORK — Anxieties over global geopolitical and economic risks are the biggest drivers behind gold's 53 percent surge this year, which reached a milestone record of over $4,000 an ounce this week, with analysts seeing little to halt the surge.

The precious metal has doubled in value over the last three years as investors have sought safety amid conflicts around the world.

Bullion jumped 12 percent in September alone, taking silver, platinum and palladium higher as well.

"The rally is unbelievable, telling us that something bad is happening and that we should be nervous," said Dan Smith, managing director of Commodity Market Analytics.

Policymakers have also supported gold prices by keeping borrowing costs low and delaying rate hikes, prompting investors to shift toward the metal as a safe store of value.

Gold purchases by central banks have also buoyed prices. Central banks worldwide are on track to buy 1,000 metric tons of gold in 2025, marking their fourth consecutive year of significant purchases as they diversify their reserves from dollar-denominated assets into bullion, according to consultancy Metals Focus.

Though every step higher has raised the prospect of a sell-off, with indicators showing the market is increasingly overbought, conquering $4,000 may open the way for the metal to extend its bull run into 2026.

Market observers generally believe that the surge in gold prices reflects a combination of multiple factors: A weakening United States dollar and heightened fiscal uncertainty have significantly boosted gold's safe-haven appeal, while the ongoing partial US government shutdown and delays in the release of key economic data have left markets without clear guidance on the economic outlook.

Usually in a given year, one or two risk drivers move the gold price, BNP Paribas analyst David Wilson said: "But right now, everything that is a traditional gold driver is happening.

"If you're an investor, where do you put your money? If you're worried about the outlook for the US economy and US debt, do you want to buy that traditional safe-haven, which was the US Treasuries? No, the yields on longer-dated treasuries have shown that investors are reluctant."

Goldman Sachs on Monday raised its December 2026 gold price forecast to $4,900 per ounce.

"The attitude at the moment seems to be that maybe it will keep on going. Maybe right now there is no dip," BNP Paribas' Wilson said.

"What series of events has to happen to make the world take a deep breath and go actually, it's not so bad? Can we see a change in the US policy on tariffs, trade, immigration? Right now, it's difficult to see what events would suddenly change sentiment about the global outlook."

Agencies Via Xinhua