Gold Hits Historic High of $4,000 on Global De-dollarisation
Gold has just surged to a record $4,000 per ounce, its all-time high (ATH), fuelled by demand for safe assets amidst U.S. political deadlock that has forced the government to shut down since last week.
The price surge has been attributed to the post-U.S. tariff adjustment reactions, with many countries seeking to decouple from dollar dominance.
Since the beginning of the year, the gold price has surged by 50%, with the new rally driven by demand for safe asset while the US federal government shutdown drags on into its second week
Gold surged to its highest level for the first time today, and ING analysts think uncertainty about the global economy is one of the main drivers, and the US government shutdown isn’t exactly helping sentiment either.
Gold bulls emerged amidst inactive U.S. government and global economic “de-dollarisation”, and Dilin Wu, research strategist at Pepperstone, highlighted in a note that traders will be watching government funding developments and Fed speeches this week.
The government shutdown has delayed key payroll data, further clouding an already uncertain economic outlook. With official data delayed, traders are relying on private reports for economic insight, while the central bank faces challenges in making monetary policy decisions.
Still, markets are pricing in a quarter-point cut this month, which would further benefit gold, as it doesn’t pay interest. Policy uncertainty and growing bets on Federal Reserve easing are keeping safe-haven demand strong.
Investors are adding gold ETFs at a rapid pace. Last week, gold-backed exchange-traded funds expanded again, taking the total gold ETF holdings to the highest level since September 2022.
There is still room for further additions, given the current total remains shy of the peak hit in 2020. More inflows could push gold even higher.
Gold has staged a historic rally, doubling in less than two years, spurred by central bank buying as it diversifies away from the US dollar, President Donald Trump’s aggressive trade policy and conflicts in the Middle East and Ukraine.
Looking ahead, central banks are still buying – the People’s Bank of China extended its gold buying streak in September for an 11th consecutive month despite record high prices.
Trump’s trade war is still pressing on, geopolitical risks remain elevated, and ETF holdings continue to expand while expectations of more Fed rate cuts intensify. All of this suggests that gold has still further room to run.
Over the past week, gold has maintained a strong upward trajectory. On Monday morning, prices successfully broke above $3,900, repeatedly setting new record highs.
The rally has been fueled by uncertainty surrounding the U.S. government shutdown and the ongoing global “de-dollarisation” trend, while technical indicators suggest short-term retracement pressures may emerge.
On the structural front, two key forces reduce gold’s sensitivity to short-term capital flows, Linh Tran, market analyst at XS.com, said in a note this week.
First, net central bank purchases, which are strategic in nature (diversifying reserves, reducing USD exposure, hedging sanctions risk) and less affected by market noise.
Second, ETF inflows have shown signs of returning after the subdued 2022–2023 period; while not linear, recent months have been mostly positive, absorbing secondary supply as derivative markets fluctuate.
On the supply side, slower global mine growth, rising marginal costs, and long investment cycles mean low supply elasticity—explaining why corrections more often form consolidation zones rather than full reversals when underlying demand persists.
Geopolitics remains a key catalyst: unresolved tensions in Gaza, rising NATO–Russia frictions raising miscalculation risks, and the possibility of renewed trade disputes in an election cycle all help keep global risk premia elevated.
These “hotspots” make it difficult for institutional investors to materially lower defensive allocations, underpinning gold even when macro data temporarily favours risk assets.
Analysts believe that gold retains a clearly positive medium-term outlook despite the likelihood of short-term corrections driven by data surprises.
Having set an impressive high, the metal is now in a rebalancing phase. In this environment, a cautious approach is warranted—favouring buying on controlled pullbacks rather than chasing breakouts—to manage volatility while aligning with the structural drivers that continue to support gold.
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