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

Spot gold rose 0.5% to $4002.53 per ounce by 0213 GMT. December futures for gold increased 0.7% to $4034.07 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 gaining 27% in 2024.

According to Tai Wong, an independent metals trader, “There is a lot of confidence in this trade currently to the extent that the market will be watching 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 that the fundamental drivers of the trade — huge and growing debt, diversification of reserves, and a weak dollar — will change in the medium term.”

Ray Dalio, founder of Bridgewater Associates, affirmed that investors should allocate up to 15% of their investment portfolios to gold even as the precious metal hits its all-time high surpassing $4000 per ounce.

Dalio said on Tuesday at an economic forum in Greenwich, Connecticut: “Gold is an excellent portfolio diversifier. From a strategic asset allocation perspective, you probably want to have about 15% of your investment portfolio in gold… because it is one of the assets that performs very well when the core assets in the portfolio decline.”

The billionaire investor compared today’s environment to the early 1970s, when inflation, massive government spending, and high debt burdens eroded confidence in paper assets and fiat currencies.

He said, “It’s like the early seventies… where do you put your money?” He added, “When you hold your money and put it into a debt instrument, and when there is this supply of debt and debt instruments, it is not an effective store of wealth.”

Dalio’s recommendation contrasts with traditional financial advisors’ guidance on investment portfolios, which typically advise clients to hold mostly stocks and some bonds in a 60-40 ratio. Alternative assets like gold and other commodities are usually suggested to form a low single-digit percentage of any investment portfolio due to their low income generation.

Dalio said gold is an exceptional hedge in times of monetary deterioration and geopolitical uncertainty.

He added, “Gold is the only asset one can own without relying on someone else to pay money to you.”

Jeffrey Gundlach, CEO of DoubleLine Capital, recently recommended increasing gold weighting — up to 25% in the portfolio — believing gold will continue to stand out amid inflationary pressures and a weak dollar.

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

The US government shutdown entered its seventh day on 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 another 25 basis point cut in December.

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

Analysts say a “fear of missing out” is also fueling 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.”

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.