Gold prices surged to unprecedented levels, with bullion reaching $3,999.41 an ounce, driven by market uncertainty stemming from the US government shutdown, volatility in technology stocks, and political developments in Japan and France. December futures in New York briefly surpassed $4,000 for the first time on Tuesday.

Market Uncertainty Fuels Demand

The US government shutdown, now in its second week, has delayed key economic data, complicating forecasts for the Federal Reserve’s rate-cut strategy. Investors are also cautious after signs that enthusiasm around artificial intelligence may have peaked, including reports on Oracle Corp.’s cloud margins. Political instability in France and a leadership change in Japan have further added to global uncertainty, boosting demand for gold as a safe-haven asset.

Gold’s Surge in Context

Gold has risen over 50% this year, fueled by trade and geopolitical shifts. Central banks remain significant buyers, while last month’s Fed rate cut encouraged investment in gold-backed exchange-traded funds. Goldman Sachs recently raised its forecast for December 2026 gold prices to $4,900 an ounce, up from $4,300, citing the ongoing rally.

Bart Melek, head of commodities strategy at TD Securities, noted: “The narratives surrounding de-dollarization and de-globalization have galvanized demand for gold. Given the speed and magnitude of the rally since mid-August, speculators may consider taking some profits.”

Current Trading and Market Sentiment

Spot gold rose 0.3% to $3,996.11 an ounce in Singapore trading. The US dollar remained stable, while silver edged higher following a 1.4% loss in the previous session.

Billionaire investor Ray Dalio highlighted gold as a stronger haven than the dollar, comparing the current rally to the 1970s period of high inflation and economic instability. Citadel founder Ken Griffin attributed the surge in bullion prices to rising anxiety about the US dollar.

Hebe Chen, analyst at Vantage Markets, commented: “The climb to the $4,000 milestone reflects not only surging safe-haven demand but also deepening distrust in paper assets amid fiscal risks and geopolitical tensions. A short-term consolidation appears likely after such a relentless advance.”