By Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade
Gold broke above the USD 4,000 mark on Wednesday, setting a historic milestone as investors piled into the metal amid a confluence of global uncertainties and a dovish US policy outlook. The prolonged government shutdown in Washington, now in its second week, has delayed key data releases, complicating the Fed’s task of assessing economic conditions. Traders are still pricing in 25-basis-point cuts at both the October and December meetings, supported by recent comments from Fed officials advocating pre-emptive easing to shield the labour market.
Political turbulence abroad has added further fuel to bullion’s rally. France’s latest leadership crisis and Japan’s recent change of prime minister have heightened investor caution, amplifying safe-haven demand.
ETF inflows have magnified the rally. US-listed gold funds attracted a record USD 35 billion by end-September, surpassing the full-year peak set in 2020, while global inflows hit $64 billion year-to-date. September alone saw USD 17.3 billion of new allocations, underscoring the strength of institutional and retail appetite for gold.
Geopolitical risks continue to underpin sentiment. Israeli and Hamas delegations met in Egypt for a third day of ceasefire talks, but hostilities persisted in Gaza. Meanwhile, tensions in Eastern Europe showed no sign of easing.