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The madness behind gold breaking $4,000! Investors rush to enter the market, will they target 5,000 next?
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Hello everyone, today XM Forex will bring you "[XM official website]: The madness behind gold breaking through 4,000 US dollars! Investors are running into the market, will the next step be to 5,000?". Hope this helps you! The original content is as follows:
On Wednesday (October 8) during the Asia-Europe time period, the global financial market witnessed a milestone moment - the spot gold price exceeded US$4,000 per ounce for the first time. As of 14:57, it once set a new record high to US$4,036.98, and is currently trading around US$4,032.16 per ounce. At the same time, the futures market was equally hot, with New York gold futures for December delivery hitting a record high of $4,059.3. This rise is not accidental, but the result of gold’s continued strength since 2025: following a 27% rise in 2024, gold has soared a cumulative 53% this year, becoming one of the world’s most impressive-performing assets. Market analysts pointed out that behind this "gold storm" is the dual thrust of economic turmoil and policy changes.
Three engines drive gold prices to soar
Behind this gold feast is the joint support of many forces. The Fed's monetary policy shift has become the strongest driver. As the U.S. government shutdown enters its seventh day, the release of key economic data has stalled, and market expectations for interest rate cuts have become stronger. Futures contracts show that traders are betting with a probability of over 80% that the Federal Reserve will announce an interest rate cut of 25 basis points at this month’s meeting and implement another rate cut of the same magnitude in December.
Independent metal trader Tai Wong said bluntly: "With the expectation that the Federal Reserve will continue to release water, the market has set its sights on the next round mark of US$5,000."
The smell of geopolitical gunpowder continues to strengthen the safe-haven charm of gold. The ongoing tense conflicts in the Middle East, the stalemate in the war in Ukraine, and the political situation caused by the election of Sanae Takaichi, the president of the Liberal Democratic Party of JapanInternational events such as unrest and French social riots are like successive eruptions of volcanoes, driving global capital into the "safe haven" of gold. Tim Waterer, chief market analyst at KCMTrade, pointed out: "The dual superposition of government shutdowns and geopolitical risks is reshaping the logic of global asset allocation."
What deserves more attention is the strategic shift of global central banks and institutional investors. The process of "de-dollarization" of foreign exchange reserves in various countries is accelerating, ETFs backed by physical gold have seen huge capital inflows, and top investment banks such as Goldman Sachs and UBS have continuously raised their gold price forecasts, forming a strong buyer's power. Capital analyst Kyle Rodda added: "The currency and credit concerns caused by the deterioration of Japan's fiscal deficit have become the trigger for the latest market."
Goldman Sachs on Monday raised its gold price forecast in December 2026 from $4,300/ounce to $4,900/ounce, citing strong inflows of Western ETF funds and the possibility of central banks buying gold.
The market game with undercurrents
Despite the strong bull market atmosphere, there are still undercurrents lurking deep in the market. Some analysts warned that the temptation to take profits near the $4,000 mark may trigger a short-term technical correction. However, most professional investors believe that any correction is a good entry opportunity, because the core factors driving gold's long-term bullishness - the expansion of global debt, the shaken US dollar credit system, the trend of diversification of reserve assets, etc. - will be difficult to reverse in the next three years.
This group mentality of "fear of missing out" is forming a self-reinforcing cycle. In trading floors from Tokyo to London, fund managers have adjusted their position structures and increased their gold allocation ratio from the traditional 3-5% to more than 10%. A Wall Street trading executive revealed: "Even the most conservative pension funds are asking how to deal with possible hyperinflation if they do not hold gold?"
Investment inspiration in the new era of gold
When the price of gold stands firmly above $4,000, the market is redefining the role of gold in the modern financial system. It is no longer just a tool to resist inflation, but has become a "ballast stone" in response to the restructuring of the international monetary system. From the policy shift of the Federal Reserve to the fission of the geopolitical structure, from the central bank's gold purchase wave to the awakening of retail investors, these factors have jointly built a solid foundation for gold.
As a senior market observer said: "When government debt exceeds the limit of economic endurance, and when cracks appear in the international payment system, gold will eventually demonstrate its monetary essence that has remained unchanged for thousands of years." This gold drama, which began with hedging demand, promoted monetary easing, and sublimated into credit reconstruction, may have just begun.
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