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Gold surged past $4,000 per ounce for the first time late Monday, then again on Tuesday morning, extending a rally that has lifted prices close to 50 percent since the start of the year.
Institutional investors, central banks and individuals have been snapping up the "safe haven” asset,feeding an upswing in prices that typically signals economic uncertainty.
Gold’s latest string of record highs coincides with the government shutdown that began October 1.
But its 2025 run-up is rooted in ongoing trade policy and geopolitical tensions, gathering steam in April as President Donald Trump’s "Liberation Day” tariffs rattled markets. Prices jumped again in August and September as the US job market showed signs of cooling.
"Momentum in gold has been unrelenting,” LPL Financial’s chief technical strategist, Adam Turnquist, said in a note to investors, adding that there have been about three "upside days” for gold to every downside day since mid-August.
Much of the recent price increase is driven by central banks seeking to diversify their reserve holdings, as well as investors who "are definitely looking at gold as an alternative to the US dollar,” said Joe Cavatoni, chief market strategist at the World gold Council, a trade group.
In the year ended August 31, for example, the central bank of Poland purchased more than 60 metric tons of gold, according to the World gold Council. The central banks of Azerbaijan, Kazakhstan, China and Turkey also made significant purchases.
So far, 2025 has been the best year for gold prices since 1979, when the dollar lost value and global economies were racked by an oil crisis.
In an interview with Bloomberg on Monday, Citadel chief executive Ken Griffin said he found the idea of investors starting to view gold as a safer asset than dollar "really concerning.”
"We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize, or de-risk their portfolios vis-à-vis US sovereign risk,” he said.
The banks have played a role in driving prices higher, because they have deep pockets and are less sensitive to prices, meaning they will keep buying even as gold becomes more expensive.
"It’s never the price that determines whether a central bank is going to get involved in the market; it’s their own specific policy,” said Bob Gottlieb, a former metals trader with leading financial institutions.
As of midday Tuesday, the US dollar was down about 9 percent since the start of the year as measured by DXY, which measures the greenback against a basket of foreign currencies.
Other geopolitical events also have added to the uncertainty in markets, analysts said.
In France, Prime Minister Sébastien Lecornu resigned Monday after less than a month on the job amid a budget crisis, sending stocks and bond prices downward. Global markets also were rattled by Japan’s election of hard-line conservative leader Sanae Takaichi, sparking a bond-market sell-off there, too.
gold also has benefited from a surge of interest from retail traders, who have been able to buy one-ounce gold bars from Costco since 2023.
A selection of exchange-traded funds that are physically backed by gold attracted an estimated $26 billion in the three-month period ending Sept. 30, according to a Tuesday report from the World gold Council. The record quarter was driven by new investments from North America and Europe.
The rush into gold partially reflects the influence of trading apps, which allow people to invest small sums of money in gold, said Wayne Wicker, president of the investment firm Opal Capital.
"In today’s marketplace, there are so many ETFs that enable easy access to gold, that making an investment is much easier than it was during past bill markets,” Wicker said, using the acronym for exchange-traded funds.
Mining stocks have ridden the wave higher throughout the year. Newmont, a US-based company with gold mines in numerous countries, has rocketed 130 percent since the start of the year. Canada’s Agnico Eagle Mines and Barrick Mining both saw their stock prices more than double over the same time period.
Some leading hedge fund managers - including DoubleLine Capital CEO Jeffrey Gundlach and Bridgewater Associates founder Ray Dalio - have recently recommended investors increase their exposure to gold.
Dalio suggested that investors use gold as a way to diversify their portfolios. "If you look at it just from a strategic asset allocation perspective, you would probably have something like 15 percent of your portfolio in gold … because it is one asset that does very well when the typical parts of the portfolio go down,” Dalio said Tuesday at the Greenwich Economic Forum in Connecticut.
But otherobservers say gold may be headed for a correction or a decline as economic pressure diminishes demand for the metal, which is used for both industrial purposes and jewelry. And the Commodity Futures Trade Commission has cautioned consumers to be wary of gold, given its volatility.
Wicker pointed out that the performance of gold has been inconsistent over the years, meaning it carries risks for those using it as a diversification tool.
"I would resist the temptation of holding more than a modest exposure, since it does not provide any income to protect against downside volatility which we have seen previously,” Wicker said.
