Gold hit a record high just below $4,000 an ounce as the US government shutdown, a wobble in technology stocks, and political shake-ups in Japan and France buoyed demand.
Bullion rose as high as $3,999.41 an ounce, before paring some gains. December futures in New York - the most active contract - surpassed $4,000 for the first time on Tuesday.
The US shutdown, now into its second week, has delayed key data, muddying the outlook for the Federal Reserve's rate-cutting path. Investors are also monitoring signs the ebullience driven by artificial intelligence may have reached excessive levels, after a report on Oracle Corp.'s cloud margins, while a political crisis in France and a change of leadership in Japan are adding to the uncertainty.
Gold has soared more than 50% this year as President Donald Trump shook up trade and geopolitics, helping to spur a move away from the dollar. Central banks have been enthusiastic buyers, while the Fed's rate cut last month drove investors into gold-backed exchange-traded funds. Goldman Sachs Group Inc. sees room for the rally to continue, raising its forecast for December 2026 to $4,900 an ounce, up from $4,300.
"The ever-louder narratives surrounding de-dollarization and de-globalization" have gavlanized demand for gold, Bart Melek, head of commodities strategy at TD Securities, said in a note. "Given the speed and magnitude of the rally since mid-August, there's a risk that speculators may be tempted to take some profits."
Spot gold rose 0.3% to $3,996.11 an ounce at 8:49 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady. Silver edged higher, after losing 1.4% in the previous session.
Billionaire Ray Dalio said Tuesday that gold is "certainly" more of a safe haven than the dollar and the record-setting rally echoes the 1970s, when it surged during a time of high inflation and economic instability. The remarks from the founder of hedge-fund firm Bridgewater Associates came after Citadel founder Ken Griffin said that bullion's rise reflected anxiety about the US currency.
"The metal's climb to the $4,000 milestone reflects not only surging safe-haven demand, but also a deepening distrust in paper assets as fiscal risks and geopolitical tensions intensify," said Hebe Chen, an analyst at Vantage Markets in Melbourne. "In the short term, a consolidation phase looks likely after such a relentless advance."
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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