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By Amna Toufeeq | 08, October 2025
Experts predict lots of money will flow into gold ETFs and central banks will buy more gold.
Gold prices climbed above $4,000 an ounce, reaching a new high on Wednesday. This surge was fueled by investors looking for safe investments due to growing economic and world instability. Also, people expect the US Federal Reserve to lower interest rates again.
Spot gold increased by 0.7% to $4,011.18 per ounce by 0300 GMT. US gold futures for December rose by 0.7% to $4,033.40 per ounce.
Gold is usually seen as a safe investment when things are uncertain. The price of gold has increased by 53% this year, after going up 27% in 2024. According to Tai Wong, an independent metals trader, many people believe in gold right now and think the price could reach $5,000 as the Federal Reserve lowers interest rates
. He adds that events like peace agreements in the Middle East or Ukraine might cause temporary setbacks, but the main reasons for investing in gold, such as large debts, countries diversifying their reserves, and a weak dollar, probably won’t change soon. The rise in gold prices is due to several things, including expected interest rate cuts, political and economic uncertainty, central banks buying gold, money flowing into gold funds, and a weak dollar.
The US government shutdown has delayed the release of important economic data, so investors are using other sources to predict when and how much the Federal Reserve will cut rates.
Investors expect a small rate cut at the Fed meeting this month and another one in December. Tim Waterer, Chief Market Analyst at KCM Trade said that, higher uncertainty usually causes gold prices to increase, which we’re seeing now.
Market conditions of lower US interest rates and the ongoing government shutdown are still good for gold. But the desire to secure profits around $4,000 presents a possible short-term risk.
Analysts say the rise in gold prices is partly due to a “fear of missing out.” Political problems in France and Japan have also increased the demand for gold as a safe investment.
According to Capital.com analyst Kyle Rodda, the recent price increase is related to Sanae Takaichi’s election and the possibility of more government spending in Japan. This is connected to the current market trend of encouraging inflation
. Experts predict that strong investment in gold exchange-traded funds, central banks purchasing gold, and the expectation of lower U.S.
interest rates will keep gold prices high in 2026. Because of this, Goldman Sachs and UBS have increased their price predictions for gold. In other precious metals markets, silver went up 1.3% to $48.42 per ounce, platinum increased 2.5% to $1,658.40, and palladium rose 1.8% to $1,361.89.
