Gold futures have surged above $4,000 US per troy ounce for the first time, driven by investors seeking a secure haven amid the ongoing U.S. government shutdown. The price of gold reached a historic high on Tuesday morning after closing at $3,960.60 per troy ounce in New York the previous day.
Heightened demand for gold often occurs when investors are anxious and looking for stable investments. Prior to the shutdown, gold and other metals like silver had already experienced significant gains due to the uncertainty surrounding the global economy from President Donald Trump’s tariffs.
The recent trend of lower interest rates has further increased the appeal of gold as an investment compared to interest-bearing options. Gold futures have surged by around 50 percent since the beginning of 2025, trading at approximately $4,013 per troy ounce as of Tuesday morning. Silver has also seen substantial gains this year, with futures up by about 60 percent, trading close to $48 per troy ounce.
The economic turbulence in recent times has largely stemmed from Trump’s trade policies, with new tariffs leading to increased costs and weakening the job market. This has resulted in reduced hiring, rising inflation, and a growing sense of pessimism among consumers. The government shutdown has added to these concerns, causing delays in key economic data and financial strain on federal employees working without pay.
Giovanni Staunovo, a commodity analyst at UBS Global Wealth Management, attributes the surge in gold investments to the continued weakness of the U.S. dollar and anticipated rate cuts by the Federal Reserve. Central banks worldwide, geopolitical tensions, and ongoing conflicts have also contributed to the strong demand for gold.
Staunovo highlighted that the gold rally began in 2022, triggered by actions against Russian foreign holdings during the conflict in Ukraine. While gold is viewed as a safe asset, its volatility should be considered, with Staunovo advising investors to be cautious due to price fluctuations, especially with physical gold items like coins or bars.
