Key Points
- · Gold prices surged to near $4,000 per ounce, approaching record highs in early October 2025.
- · The rally was driven by the US government shutdown, weaker US dollar, and expectations of Federal Reserve interest rate cuts.
- · Gold hit a record intraday high of $3,896.49 per ounce and was trading around $3,886 on October 4 and 5.
- · The US government shutdown is the first in almost seven years, with federal funding stalled and thousands of jobs at risk.
- · Softer US jobs data added to concerns about economic growth and reinforced the likelihood of Fed rate cuts.
- · Analysts and brokers forecast gold could reach or exceed $4,000 soon due to geopolitical and fiscal uncertainties.
- · The rally extends gold's strong performance in 2025, with gains nearing 48% year-to-date, the best annual rise since 1979.
- · UBS and HSBC analysts expect further upward momentum fueled by lower interest rates and a weakening dollar.
- · Market uncertainties around US economic data delays and the shutdown duration contribute to gold's safe-haven appeal.
Why is gold surging to nearly $4,000 per ounce in 2025?
As reported by Kayla Rivas of CNBC, gold prices soared to unprecedented levels, almost touching $4,000 per ounce, coinciding with the US government entering a shutdown early October 2025 due to lawmakers' failure to agree on funding. Gold futures settled at $3,897.50 per ounce while spot gold traded near $3,866.66. This marks a roughly 50% increase since the start of the year. Usually, government shutdowns have limited impact on markets, but the timing combined with softer jobs data has heightened economic uncertainty and pushed investors towards gold, a known safe-haven asset during instability.
The US government shutdown interrupted many federal operations and is threatening thousands of federal jobs, with no resolution in sight as partisan divides persist. During Donald Trump's first term, a similar shutdown lasted 34 days, the longest in US history. This prolonged shutdown adds to market unease, motivating investors to seek safer assets.
How is the US government shutdown impacting economic data and the dollar?
According to reports by Matt Smith from Reuters, the shutdown delayed critical US employment data releases such as the September non-farm payrolls report. These delays contribute to uncertainty about the Federal Reserve’s policy outlook just weeks before their next meeting. A softer labour market forecast, including a surprising decline of 32,000 private sector jobs in September, signals a weakening economy.
Marex analyst Edward Meir highlighted the negative effect on the US dollar due to the shutdown, which in turn made dollar-priced gold more affordable to international buyers. The dollar weakened against major currencies as riskier assets declined, further supporting gold’s rise.
What are experts saying about the near-term outlook for gold prices?
HSBC analysts stated that gold could trade above $4,000 per ounce in the near term. They cited geopolitical risks, US fiscal uncertainties, and perceived threats to the Federal Reserve's independence as key drivers pushing gold higher.
UBS analysts expect gold to rise to $4,200 per ounce over the coming months, propelled by the falling opportunity cost of holding gold due to anticipated interest rate cuts.
Will Rhind from GraniteShares told Investing News Network the weakening US dollar and alternative appeal of gold as a safe-haven, especially amid growing government debt and inflation concerns, continue to feed upward momentum.
Joe Cavatoni of the World Gold Council added that global investors seeking portfolio diversification and risk reduction are helping maintain the surge in gold demand. The Federal Reserve’s signals of economic deterioration and a possible shift towards stagflation further strengthen gold's appeal as an alternative investment.
Has gold’s price rise been sustained or volatile recently?
Trading Economics data noted that gold rose to $3,886.55 on October 3, 2025, reflecting a 0.79% increase from the day before. Over the previous month, gold had risen nearly 10%, and was up 46.5% compared to the previous year. Gold is predicted to continue rising towards $3,940 by the end of the quarter and potentially $4,112 in the next year.
While there was a slight dip on October 2 due to a stronger dollar and profit-taking by traders, overall the momentum remains bullish as investors await more US economic data and Federal Reserve signals.
Why is gold considered a safe-haven investment amid current US conditions?
Gold does not yield interest, but it preserves value when real interest rates fall and markets face stress. The current US economic environment features rising federal debt, political deadlock causing shutdowns, and muted economic growth, all of which erode confidence in riskier assets like stocks. Investors expect the Fed to cut rates soon, expanding gold’s attractiveness as a non-yielding but stable store of wealth.
The political impasse and delayed data releases amplify uncertainty, making gold an ideal safe haven as portfolio insurance amid turbulent fiscal and economic conditions.
How does this gold rally compare historically?
Gold’s nearly 48% rise year-to-date is its best annual performance since 1979. The precious metal has hit a record 39 times in 2025 alone, boosted by global inflation-recession dilemmas, monetary easing expectations, and escalating geopolitical tensions.
The combined effect of US government shutdown fears, a softening labour market, and expected Fed rate cuts has created a confluence of factors not commonly seen, strengthening gold’s rally to historic levels.