Spot gold surged past the $4,000 an ounce mark for the first time in history, as renewed fears of a US government shutdown and growing concerns over economic stability fueled a record-breaking rally in precious metals.

The metal has now soared more than 50% this year, outperforming equities and marking its best annual performance since the 1970s, driven by central bank buying, investor demand for safety, and rising skepticism about the Federal Reserve’s independence.

A Symbolic Milestone

Just two years ago, gold traded below $2,000. The surge reflects how rapidly investors have shifted toward safe-haven assets amid political dysfunction in Washington, the Fed’s monetary easing cycle, and mounting global geopolitical risks.

Bullion-backed ETFs saw their biggest monthly inflows in over three years in September, as investors rushed to hedge against inflation and currency volatility.

The metal reached an intraday high of $4,040.41 an ounce on Wednesday before stabilizing around $4,039.48 in London trading.

From Crisis to Rally

Gold’s trajectory often mirrors global economic turmoil. It crossed: $1,000 after the 2008 financial crisis, $2,000 during the Covid-19 pandemic, $3,000 amid the 2020s trade wars — and now, $4,000, amid political and monetary uncertainty in the US.

The latest surge comes as President Donald Trump intensifies his criticism of the Federal Reserve, including threats against Chair Jerome Powell and attempts to replace Governor Lisa Cook — a move that analysts view as a direct challenge to the Fed’s independence.

Central Banks Lead the Charge

Global central banks have been accumulating gold reserves at a record pace since 2022, following the freezing of Russia’s foreign-exchange assets. The shift has been described as a “structural change in reserve management behavior”, according to Goldman Sachs, which expects continued buying for at least the next three years.

Goldman recently raised its forecast for December 2026 to $4,900 per ounce, citing sustained central bank accumulation and investor inflows.

Looking Ahead

The combination of monetary easing, fiscal tension, and central bank buying has created a perfect storm for gold’s rally. With US political gridlock deepening and real yields slipping, investors are treating the precious metal as both a hedge and a high-performing asset.

Among other metals, silver jumped 2.3% to $48.94 an ounce, its highest level since 2011, while platinum and palladium also advanced. The Bloomberg Dollar Spot Index remained little changed.

As the world watches Washington’s fiscal battles unfold, one thing is clear — in times of instability, gold once again reigns supreme.