Gold surges Past $4,000 Amidst Global Uncertainty
Gold prices reached a historic high of over $4,000 per ounce on Wednesday, driven by investor demand for a safe haven asset. This surge comes as concerns mount over a potential US government shutdown and expectations of future interest rate cuts by the United states Federal Reserve.
Globally, gold climbed to a peak of $4,006.68 on Wednesday, even with a strengthening US dollar. The precious metal has experienced a significant rally this year, increasing by more than 50% since the beginning of the year, fueled by factors including global economic uncertainty, geopolitical tensions, and the impact of Donald Trump’s trade policies. recent political instability in France, including the resignation of the prime minister and calls for early elections from President Emmanuel Macron’s former premier, further bolstered gold’s appeal.
In Pakistan, the All Pakistan Sarafa Gems and Jewellers Association reported a 24-karat gold price of Rs425,178 per tola and Rs365,421 per 10 grammes, based on interbank exchange rates.
The rally in gold coincides with a period of reassessment in equity markets, particularly regarding the recent tech-driven surge. Concerns are growing that the rapid gains in some equity markets may indicate an asset bubble.A disappointing profit margin report from Oracle,a major software firm,triggered selling across Asian markets on Thursday,with Hong Kong and Taipei experiencing the largest declines. Sydney and Singapore also saw losses,while Tokyo showed a slight increase,supported by optimism surrounding the election of Sanae Takaichi as the ruling party’s leader and potential for further stimulus measures. Wellington, Manila, and Jakarta also saw modest gains.
According to Taylor Nugent at National Australia Bank, ”The rapid rise in gold prices has been supported by rising inflows into (exchange-traded funds) and central bank buying, including solid demand from China, as gold benefits from political, economic, and inflation uncertainty.”
The US government shutdown is adding to investor unease, delaying the release of key economic data – including jobs reports - and complicating the Federal Reserve’s decision-making process regarding interest rate adjustments. Silver prices also rose, nearing their own record highs.
