The price of gold climbed past $4,000 an ounce on Tuesday for the first time in history, driven by a weaker dollar, increasing expectations for more Federal Reserve rate cuts and renewed demands from central banks and investors seeking a hedge against mounting geopolitical and economic uncertainty.
Financial contracts on the Commodity Exchange (COMEX) were trading around $4,005 an ounce after breaking the $4,000 mark, up roughly 0.7% on the day and more than 50% year to date, the metal’s strongest calendar-year gain since 1979. Prices have been propelled this year as the US Dollar Index fell about 10% and investors sought assets viewed as stores of value amid policy and trade turmoil.
“Gold is the one asset that does very well when the typical parts of your portfolio go down,” Bridgewater Associates founder Ray Dalio told NBC News Tuesday, recommending that investors allocate “something like 15%” of their portfolios to the metal.
The latest increase in the price of gold followed the Federal Reserve’s rate cut
The latest increase in the price of gold followed the Federal Reserve’s September rate cut and market expectations for two additional reductions before year’s end; the federal funds rate currently stands at 4.00% to 4.25%. The central bank next meets October 29.
Central banks, including buyers in China, and retail investors have rushed into gold, with the World Gold Council reporting record quarterly inflows into gold-backed exchange-traded funds. Global ETF inflows jumped to $26 billion for the three months ending in September, the council said, while average daily trading volumes surged.
Analysts and strategists pointed to a mix of factors behind the increase, including a softer dollar, fading appeal of short-term debt after the Fed cut rates, as well as concerns about the independence of the Fed amid political pressure. “If Fed independence fears are realized, it could diminish confidence in treasuries and rapidly increase anxiety about debt debasement,” JPMorgan analysts warned in a recent note, adding that further rotations into gold could push prices even higher.
GOLD hit above $4,000/oz this morning when the market opened. The signal couldn’t be clearer.
BUY GOLD. WEAR DIAMONDS. pic.twitter.com/LrdjnR7iYY
— Steve Hanke (@steve_hanke) October 7, 2025
Goldman Sachs reiterated gold as a top recommendation
Wall Street’s tone was broadly bullish even as some cautioned about a pullback. Goldman Sachs reiterated gold as a top long recommendation, while Bank of America warned Monday that the market faced “uptrend exhaustion” and that a consolidation or correction was possible in the fourth quarter.
Gold has also benefited from central-bank diversification away from US Treasury following sanctions and geopolitical fractures, and from retail buyers seeking protection against stubborn inflation.
Still, strategists urged caution. Bank of America and other banks said strong momentum could give way to profit-taking or a pause in the rally. “There are scenarios where a correction is likely,” Bank of America analysts wrote, even as they acknowledged the metal’s robust run.
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