On Monday, October 6, the price of gold for the first time in history exceeded the mark of $3900 per ounce, which was a consequence of a sharp increase in demand for safe assets. Uncertainty prevails in the market due to the weakening of the Japanese yen, the suspension of the US government, and expectations of a new interest rate cut by the Federal Reserve System. This was reported by Reuters, writes UNN.
Details
As of 02:08 GMT, the spot price of gold rose by 1.1% to $3929.91 per ounce, while December futures in the US rose by 1.2% to $3954.70. As KCM Trade chief market analyst Tim Waterer noted, "the weakness of the yen amid the Japanese LDP elections left investors with one less safe asset to turn to, and gold was able to capitalize on that."
According to Waterer, with the expected Fed rate cuts, gold remains a key capital protection tool.
A prolonged US government shutdown means that a cloud of uncertainty and potential impact on GDP still hangs over the country's economy.
Since the beginning of 2025, the value of gold has already increased by 49%, after a 27% rise in 2024. This is facilitated by active purchases by central banks, increased demand for gold-backed ETFs, a weakening dollar, and interest from retail investors looking for a reliable hedge against geopolitical risks.
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The growth was further boosted by the Fed's announcement last month of another 0.25% rate cut, which made gold more attractive during a period of low interest rates.
Earlier, in March, the spot price first exceeded $3000, and in September – $3700. Against this background, analysts and brokers are increasingly confident in predicting a further increase in the value of gold to new historical highs.
Recall
According to fintech expert and co-founder of Concord Fintech Solutions Olena Sosiedka, the trend of rising gold prices is reinforced by the unstable geopolitical situation in the world.
Wars, trade conflicts, unpredictable decisions of world leaders – all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So the jump in the value of gold is not just a financial event, it is a marker of investor confidence in the modern economy. And for the fintech market, this is a clear signal: technology can make finance more convenient, but the basis of trust is always built on simple and understandable values.
She noted that the current rise in gold prices is just the tip of the iceberg, because at the global level it indicates investors' preparation for a weakening dollar. The depreciation of the American currency makes gold more accessible to buyers in international markets, which, in turn, increases demand and stimulates further price growth.
The main drivers of stable demand for gold remain central banks, primarily China and Russia. They are actively increasing their gold reserves, effectively implementing a de-dollarization strategy and demonstrating a desire to reduce dependence on the American currency.