An extraordinary milestone was achieved overnight for the price of gold.
The spot gold price topped $4,000 an ounce for the first time on record – and futures data suggests no let up in its upwards momentum for the rest of 2025.
It was trading at $4,035 early on Wednesday morning.
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It has risen steadily since Trump 2.0 began in January, when it stood at a level around $2,600.
Sky News was quick to report on the early reasons for a spike in the price when heavy outflows were witnessed at the Bank of England.
Gold has traditionally been seen as a safe haven for investors’ money in tough times.
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There has been plenty to worry about this year – not all of it down to Donald Trump.
Analysts say the surge during 2025 can be partly explained as a hedge against the US trade war and the resulting slowdown in the global economy which has hit demand for many traditional growth-linked stocks and the dollar.
Wider economic and geopolitical uncertainty, such as the tensions in the Middle East and concerns about the sustainability of US government debt levels, have also been at play.
Over this week, the political crisis in France and implications of the continuing US government shutdown have been driving forces.
But there is one other, crucial, factor that has entered the equation, particularly since the end of the summer.
Many analysts say that gold has become a collective hedge against the possible implosion of the AI-driven boom for technology stocks in the US.
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Despite a few wobbles, there have been almost endless headlines around record values for such shares – with most investment seen as a big bet on the future rather than current earnings.
Around 35% of the market capitalisation of the S&P 500 Index trades at more than 10 times sales, according to investment firm GQG.
AI leaders such as Nvidia and companies investing big in their capabilities see huge rewards ahead in terms of both productivity and profits.
But a recent report from the Massachusetts Institute of Technology found that 95% of businesses that had integrated AI into their operations had yet to see any return on their investment.
Ahmad Assiri, research strategist at the spread betting provider Pepperstone, said gold’s $4,000 level would test appetite but the outlook remained positive for now given all the global risks still at play.
“Selling gold at this stage has become a high-risk endeavour for one simple reason, conviction.
“Institutions, central banks and retail investors alike now treat dips as a buying opportunity rather than a sign of exhaustion. One only needs to recall the $3,000 level just six months ago, reached amid the tariff headlines, to understand how sentiment has shifted.
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“This collective behaviour has created a self-reinforcing cycle where every pause in momentum is met with renewed buying.
“Gold has evolved from a traditional hedge during uncertainty into what could be described as a conviction trade, an asset whose value transcends price, reflecting deeper doubts about policy credibility and the erratic course of fiscal decision-making.”
It all suggests there is good reason for momentum behind this gold rush.
