Gold broke the $4000 per ounce level on Wednesday, reaching an all-time high, driven by investors seeking safe havens amid escalating economic and geopolitical uncertainty, alongside expectations that the Federal Reserve (the U.S. central bank) will further cut interest rates.

Spot gold rose 0.5% to $4002.53 per ounce by 02:13 GMT.

U.S. December futures for gold also increased 0.5% to $4025 per ounce.

Gold is typically considered a store of value during times of instability.

Spot gold has risen 52% since the beginning of the year after a 27% increase in 2024.

Independent metals trader Tai Wong said, “There is a lot of confidence in this trade right now to the extent that the market will be watching for the next big number, which is 5000, with the expectation that the Federal Reserve will continue cutting interest rates.”

He added, “There will be some obstacles along the way such as a permanent truce in the Middle East or Ukraine, but it is unlikely that the fundamental drivers of the trade—massive and growing debt, reserve diversification, and a weak dollar—will change in the medium term.”

A combination of factors such as increased central bank purchases, renewed interest in gold-backed ETFs, a weaker dollar, and strong individual demand has supported the yellow metal’s rise.

The U.S. government shutdown entered its seventh day on Tuesday.

This has delayed the release of key economic indicators, forcing investors to rely on secondary non-government data to anticipate the timing and extent of interest rate cuts.

Investors now expect a 25 basis point rate cut at the Federal Reserve meeting this month, followed by another 25 basis point cut in December.

Additionally, political unrest in France and Japan has boosted demand for the safe-haven metal.

Analysts say that “fear of missing out” is also driving the rally.

Giovanni Stonovo, an analyst at UBS, said, “What we are seeing now is investors buying gold despite the price increase, which adds strength to its movement.”

As for other precious metals, spot silver rose 0.5% to $48.03 per ounce, platinum increased 2.2% to $1653.21, and palladium climbed 1.3% to $1355.32.