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.
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. With bond yields now falling, the metal has regained favour among institutional investors and sovereign funds alike.
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. The bank warned that a “more politicised” central bank could lead to higher inflation, weaker bond and equity markets and a loss of confidence in the dollar as the world’s reserve currency.
The rally provided a lift for precious-metals producers on the London Stock Exchange. Endeavour Mining, listed on the FTSE 100, gained 2.8 per cent, while Hochschild Mining, a FTSE 250 group with operations in South America, rose 0.6 per cent.
Market watchers say continued strength in gold could provide support for mining shares, though further volatility is expected as investors weigh the timing of central bank policy shifts and ongoing geopolitical risks.
Read more:
Gold surges past $3,900 for the first time as investors seek safety amid global uncertainty