Gold futures have soared above $4,000 US per troy ounce for the first time, as many investors seek a safe place to park their money as the U.S. government shutdown continues.
The commodity jumped on Tuesday morning to reach a record high. The New York spot gold price had previously closed at $3,960.60 per troy ounce — the standard for measuring precious metals — on Monday.
Gold sales can rise sharply when anxious investors seek secure investments for their money.
Even before the shutdown, the asset — and other metals, like silver — had seen wide gains over the last year, as President Donald Trump's barrage of tariffs cause uncertainty around the outlook for the global economy.
More recently, the prospect of lower interest rates has also made gold a more attractive investment than interest-bearing investments.
Why prices have climbed this year
Gold futures are up about 50 per cent since the start of 2025 — trading at around $4,013 per troy ounce as of around 11:30 a.m. ET on Tuesday. That's up from around $2,670 seen at the beginning of January.
Other precious metals have also raked in gains, with silver seeing an even bigger percentage jump year to date. Silver futures are up about 60 per cent, trading at close to $48 per troy ounce Tuesday morning.
Much of the recent economic turmoil has spanned from Trump's trade wars. Since the start of 2025, steep new tariffs the president has imposed on goods coming into the U.S. from around the world have strained businesses and consumers alike — pushing costs higher and helping to weaken the job market.
As a result, hiring has plunged while inflation has inched back up — gold is considered a hedge against inflation. And more and more consumers are expressing pessimism about the road ahead.
The current U.S. government shutdown has added to those anxieties. Key economic data has been delayed — and scores of federal employees are already feeling the effects of furloughs and working without pay for the duration of the shutdown, which has no immediate end in sight.
Trump has also threatened to use the shutdown to conduct mass firings and perhaps permanently shutter offices in an attempt to punish Democrats for voting down Republican legislation.
'A safe haven asset'
Giovanni Staunovo, commodity analyst at UBS Global Wealth Management, also points to continued weakness of the U.S. dollar and renewed rate cuts from the Federal Reserve. Last month, the Fed cut its key interest rate by a quarter-point — and projected it would do so twice more this year.
Investments in gold have also been driven by other factors over time. Analysts have previously pointed to strong gold demand from central banks around the world — including amid heightened geopolitical tensions, such as the ongoing wars in Gaza and Ukraine.
WATCH | Why Costco started selling gold a few years ago: Why Costco is now selling gold Duration 1:59 Gold has long been seen as a stable investment, and at a time of global uncertainty, it’s becoming so popular that big box stores such as Costco have jumped on the bandwagon.
"The gold rally started in 2022," Staunovo said via email on Tuesday. He noted that the "trigger point" was when the U.S. and other Western allies moved to freeze around $300 billion of Russian foreign holdings at the beginning of the war in Ukraine.
"Gold is perceived by many market participants as a safe haven asset. But investors need to be aware it has a volatility of 10-15 per cent," added Staunovo — noting that smaller amounts of physical gold, such as gold coins or one-gram bars, also have larger ranges between buying and selling prices.
[SRC] https://www.cbc.ca/news/business/gold-prices-record-high-1.7653497
