Quick overview

---

Gold was trading below $2,000 just two years ago, but it has now reached a significant milestone, with returns exceeding those of stocks in this century.

 

This year alone, gold has surged over 50%, driven by worries about US fiscal stability, the independence of the Federal Reserve, and international trade. Additionally, the demand for safe-haven assets has increased due to heightened geopolitical tensions, and central banks have been buying gold at an accelerating pace.

Now, in what is seen as a significant test of the US central bank’s independence, the bullion asset crossed the $4,000 mark amid US President Donald Trump’s criticisms of the Fed, including threats against Chair Jerome Powell and efforts to remove Governor Lisa Cook.

The rally has gained urgency as investors seek to hedge against potential market instability resulting from the ongoing funding standoff in Washington. Gold, which does not yield interest, has benefited from the Fed’s monetary easing cycle. As a result, there has been a notable influx of investment into exchange-traded funds, with September recording the largest monthly inflow into bullion-backed ETFs in more than three years.

Historically, XAU/USD has often aligned with broader political and economic pressures. After the global financial crisis, gold reached $1,000 per ounce; during the COVID-19 pandemic, it climbed to $2,000; and in March, as the Trump administration’s tariff proposals affected international markets, the price hit $3,000 per ounce.