Gold prices smashed past $4,000 per ounce late Tuesday, hitting an all-time high that signals investors may be bracing for turbulence ahead.
Spot gold rose to $4,022.87 per ounce at 12:50 a.m. ET on Wednesday, extending a rally fueled by a potent mix of safe-haven flows, expectations of imminent Fed rate cuts, and rising geopolitical anxieties.
The surge may also reflect growing unease about the simultaneous run-up in global stock markets.
“Despite their recent resilience to macro data surprises, we think investors may be positioning themselves for a pullback,” the World Gold Council wrote in a Tuesday report.
“This has likely helped support gold demand, as investors look to add safe-haven assets,” the WGC added.
Investors hedge while stocks roar
Equities have been on a tear this year, with the S&P 500 and Nasdaq notching record highs, powered in part by the AI boom and expectations of easier monetary policy.
The rally has appeared unstoppable despite a wall of macroeconomic uncertainty, from President Donald Trump’s new tariffs on trading partners to expectations of the Federal Reserve’s rate cuts and the ongoing US government shutdown.
The foundation for this week’s milestone was laid in September, when global physically backed gold ETFs recorded their largest monthly inflow, resulting in the strongest quarterly inflow on record of $26 billion. By the end of the third quarter, assets under management reached a record $472 billion — up 23% from the second quarter.
Gold rallies were typically led by Eastern buyers in China and India who hoarded the yellow metal as a store of value and for cultural reasons.
This time, the rally is driven overwhelmingly by Western investors.
North American funds accounted for $16.1 billion in inflows during the third quarter, while European funds contributed $8.2 billion. Asia, by contrast, contributed $1.7 billion.
“Flows reflected both protection and momentum as investors sought a purchasing-power hedge and leaned into the breakout,” wrote WGC.
Trading activity exploded alongside prices.
In September, global gold trading volumes jumped 34% from August, averaging $388 billion a day — the second-strongest month of the year.
The fear trade’s comeback
Gold’s stunning 2025 rally has now sent spot prices up about 53% year-to-date, reigniting the “fear trade” that had cooled in previous years.
On Monday, Goldman Sachs raised its December 2026 gold forecast to $4,900 per ounce from $4,300, citing strong inflows into Western gold ETFs and central bank demand.
Some prominent investors have been sounding the same note.
Wall Street gurus, including Ray Dalio and David Einhorn, have urged investors to hold gold as a hedge against both inflation and policy volatility.
But not everyone is cheering.
On Monday, Citadel CEO Ken Griffin told Bloomberg he was uneasy about the flight to gold as a safe-haven asset because it reflects a broader derisking from the dollar, a traditional haven currency.
Meanwhile, Bank of America analysts cautioned that gold’s parabolic rally could be nearing exhaustion.
