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

Spot gold rose 0.5% to $4002.53 per ounce by 02:13 GMT. US 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 start of the year after a 27% increase in 2024, according to Reuters.

Tai Wong, an independent metals trader, said: “There is a lot of confidence in this trade right now to the extent that the market will watch for the next big number, which is 5000, with the Federal Reserve likely to 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 the fundamental drivers of the trade will change, including massive and growing debt, reserve diversification, and a weaker dollar in the medium term.”

A range of factors such as increased central bank purchases, renewed interest in gold-backed exchange-traded funds, a weaker dollar, and strong retail demand have supported the rise of the yellow metal.

The US government shutdown entered its seventh day yesterday Tuesday, delaying the release of key economic indicators and 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 this month’s Federal Reserve meeting, followed by an additional 25 basis point cut in December.

Additionally, political unrest in France and Japan has boosted demand for the yellow metal, considered a safe haven. Analysts say the “fear of missing out” is also driving the rise.

Giovanni Stonovo, an analyst at UBS, said: “What we are seeing now is investors buying gold despite the price increase, which strengthens its momentum.”

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