Gold Price Hits $4,000 for the First Time as Investors Seek Safety

Key Points

• Gold surpasses $4,000 per ounce for the first time.
• Investors turn to gold as the US dollar weakens.
• Central banks and retail buyers drive record demand.

Gold Breaks Record at $4,000

The price of gold climbed above $4,000 per ounce on Tuesday, marking a historic milestone for the precious metal. Around 11 a.m. EDT, gold futures peaked at $4,006 before briefly dipping and recovering.

Gold has risen nearly 50% this year, outperforming most major assets. The rally reflects growing investor demand for safe-haven assets amid market uncertainty and a weaker US dollar.

Dollar Weakens as Fed Cuts Rates

The US Dollar Index (DXY) has fallen 10% in 2025, as lower interest rates weigh on its strength. Inflation now sits at 2.9%, slightly above the Federal Reserve’s 2% target.

In September, the Fed cut interest rates for the first time this year. The move made short-term Treasury bills less attractive and boosted gold’s appeal.

Markets expect two more rate cuts before the end of the year, with the federal funds rate currently between 4.00% and 4.25%. The Fed’s next meeting is scheduled for October 29.

Central Banks and Retail Buyers Fuel Demand

Central banks across the globe, including China, have been increasing their gold reserves while reducing holdings of US Treasuries. This shift follows renewed geopolitical tensions and economic sanctions linked to Russia’s 2022 invasion of Ukraine.

Meanwhile, retail investors are also buying gold to protect against inflation and economic slowdowns. The combined demand has driven prices to record highs.

Experts Offer Mixed Outlook

Billionaire investor Ray Dalio of Bridgewater Associates recently advised investors to keep 15% of their portfolios in gold. He described traditional debt assets as “no longer reliable stores of wealth” and said gold “performs best when other portfolio assets decline.”

However, Bank of America cautioned that gold may face “uptrend exhaustion” in the fourth quarter. Analysts warned of a possible price correction or consolidation after months of strong gains.

Retail Gold Sales Boom

Retail giants such as Costco and Walmart are also benefiting from the gold rush. Both companies report that their gold bars sell out within hours of being listed online.

Costco began offering gold bars in 2023, and early buyers have already seen returns of over 100% since launch and more than 50% gains compared to last year’s prices.

Market Outlook

Gold’s rise above $4,000 highlights investors’ growing preference for stability and long-term value. With interest rates falling, inflation lingering, and geopolitical uncertainty persisting, experts say demand for gold may stay strong in the near term — even if short-term corrections occur.

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