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Investors fleeing uncertainty as gold blazes to new records at $3,900/oz

On Monday, gold prices soared to new records above $3,900 an ounce, as investors fled economic and political uncertainties and piled into this safe-haven metal.

Spot gold has reached a record high of $3,958.57 per ounce, and is up 48% this year compared to last year.

Gold is still playing the traditional role of a store value for investors, navigating through everything from changing Fed policy to political developments around the world. Joseph Cavatoni is a senior market strategist with the World Gold Council.

In September, the Federal Reserve cut rates for only the first time in this year. The markets are pricing in at least two more reductions this year.

The dollar is also weaker as a result of lower interest rates.

Gold demand has also been driven by the conflict in the Middle East, Russia-Ukraine and concerns about the Fed's independent. The uncertainty was heightened by the resignation of France's Prime Minister Sebastien lecornu on Monday just hours after he took office. Meanwhile, the U.S. shutdown is now in its sixth day.

The central banks' purchases and the increasing inflows of physical gold into exchange-traded fund (ETF)s have also contributed to gold's record high.

Michael Haigh is the global head of commodities at Societe Generale.

According to the WGC, global gold ETF demand increased to 587.8 tons between January-September, compared with a 6.8 ton outflow for 2024.

SILVER'S BULLISH TASK

Silver reached its highest price since May 2011 at $48.55 per ounce.

The same factors that support gold are also behind the rally of silver, including strong industrial demand, a tight spot-market and a tight supply.

Aakash Doshi is the global head of gold strategies at State Street Investment Management. He said that silver was a "catch-up" trade, as it had been outperforming gold in several quarters before mid-2025. Inclusion of the metal on a U.S. draft list critical minerals has led to speculation about potential tariffs and attracted close attention from market. Silver will experience a structural market deficit for the fifth consecutive year, with 117.6 millions troy ounces expected in 2025.

(source: Reuters)