U.S. gold futures soared beyond $4,000 per ounce for the first time ever on Tuesday, fueled by a mix of safe-haven buying amid the deepening federal government shutdown and bets on an impending Federal Reserve interest-rate cut.
The December contract climbed 0.6% to $3,998.50 by 10:28 a.m. ET, after touching a peak of $4,009.00 earlier in the session. The milestone reflects gold’s surging 51% gain this year, propelled by a weaker dollar, central bank purchases, ETF inflows, and broader economic jitters.
“It’s ongoing safe-haven flows stemming in part from the government shutdown, and no real indication that [it] is likely to be resolved in the immediate term here. So there’s still a pretty decent bid in gold,” Peter Grant, vice president and senior metals strategist at Zaner Metals, said, per Reuters.
The shutdown, now in its seventh day, has delayed critical economic reports, leaving traders to parse private-sector data for clues on the Fed’s next move. Markets are wagering on a 25-basis-point reduction at the October 29 policy meeting, followed by another in December, after September’s initial easing that made yield-free gold more appealing versus short-term Treasuries.
Global tensions added to the momentum, with currency and bond markets roiled for a second day by political upheaval in France and Japan. China’s central bank continued its buying streak, adding to reserves for an 11th consecutive month in September.
Analysts remain bullish. Goldman Sachs on Monday lifted its December 2026 forecast to $4,900 an ounce from $4,300, pointing to robust Western ETF demand and continued central bank accumulation.
Bridgewater Associates founder Ray Dalio, speaking at the Greenwich Economic Forum in Connecticut, urged allocating “something like 15% of your portfolio in gold,” calling it “the one asset that does very well when the typical parts of your portfolio go down.” He dismissed debt instruments as “not an effective store of wealth,” as CNBC reported.
Not all views are rosy. Bank of America cautioned Monday that gold’s rally risks “uptrend exhaustion,” potentially triggering a fourth-quarter pullback or consolidation as prices near $4,000.
Spot gold, the London over-the-counter benchmark, traded up 0.4% at $3,974.78, having briefly touched $3,985.48. In related metals, spot silver dipped 0.8% to $48.13 an ounce, platinum eased 0.1% to $1,627.85, while palladium advanced 2.3% to $1,349.06.