Gold's rush to record heights propelled by global anxieties

Highlights:

• Gold hits major psychological mark of $4,000/oz
• Investors seek protection from a mix of asset risks
• Gold, other precious metals benefit from this
• Gold rally seen extending into 2026

Anxieties over global geopolitical and economic risks are the biggest drivers pushing gold's 53% surge this year to a record over $4,000 an ounce, with analysts seeing little to halt the surge.

The precious metal has climbed twofold over the last three years as investors have sought safety amid Europe's biggest conflict since World War Two between Russia and Ukraine, and the fighting in Gaza between Israel and Hamas that has killed thousands, mainly Palestinians, and expanded to include airstrikes on Iran and Yemen and disruptions to maritime trade.

Economically, there is investor angst fuelled by uncertainty over the US economy as President Donald Trump has unleashed tariffs that have upended global trade, concerns about US dollar strength, Federal Reserve independence, lingering inflation, and sluggish European growth.

Bullion jumped 12% 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, which would be their fourth year of massive purchases as they diversify reserves from dollar-denominated assets into bullion, consultancy Metals Focus said.

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.

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."

As the rally has progressed, new drivers have swapped positions to push prices higher, from central bank demand to accelerating inflows into the physically-backed gold exchange-traded funds in recent weeks and also demand for bars and coins.

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.