Gold prices continued to climb on Monday, hitting a new record high as the U.S. government shutdown reached its sixth day.
Economist Peter Schiff cautioned that the rally in gold prices is signalling an imminent downturn in the equity market and that it’s nothing like 1999 when gold was near the bottom of a twenty-year bear market. In a post on X, Schiff stated that the gold market is telling us that the bust that’s coming will be much worse than the bursting of the dot-com bubble.”
Gold’s steady climb toward $4,000
Gold’s steady climb to record highs this year shows no signs of slowing, with the precious metal on track to reach the key psychological milestone of $4,000 an ounce.
Adam Koos, president and senior financial adviser at Libertas Wealth Management Group, told MarketWatch that the current surge in gold prices feels “less like bracing for a storm, and more like a plane catching a powerful tailwind midflight.” He said that gold’s rapid climb, from reaching $3,000 for the first time in mid-March toward $4,000 demonstrates “how quickly momentum can build when everything lines up at once.”
What’s driving the surge?
Koos attributed the rally in gold to five “strong tailwinds” – persistent inflation, geopolitical tension, a weaker dollar, central-bank demand, and investors hedging against volatility.
Analysts added that this year’s gold rally has been stronger because of the record levels of government debt.
Gold’s rise began long before President Donald Trump took office for the second time, but the “political theatre” surrounding Washington’s latest federal shutdown has given it “fresh thrust,” said Innes.
A string of gold record highs
According to Dow Jones Market Data, spot gold touched $3,970 per troy ounce, while December futures traded near $3,977, up about 1.75%. Gold futures rallied on Monday, closing at $3,976.30 an ounce on Comex, which marked their 42nd record-high finish of the year. During the session, the contract reached a record high of $3,994.50. Analysts pointed out that had surpassed the $3,000 threshold for the first time only on March 13 of this year.
Nearing the $4,000 mark
Stephen Innes, managing partner at SPI Asset Management, said that gold hasn’t broken through $4,000 yet, but “it’s pressing against the glass with all the weight of global uncertainty behind it.” He added that this is no longer a trade about inflation or rates, but about faith and fear, and the slow corrosion of monetary trust.
The move feels “more like a confession,” he added, with the “global market admitting that paper promises have limits,” — a reference to the dollar’s weakness this year and the large U.S. fiscal deficit.
He continued that gold wasn’t just rallying – it was re-establishing itself as the conscience of money and the metal that once glittered as insurance now burned as conviction, climbing toward the psychological $4,000 level.
Innes said that when central banks, funds and individuals all pursue the same ancient asset, it ceases to be a hedge and becomes a collective verdict. He added that in an era of weaponised finance and performative politics, gold remained what it had always been — the last honest weight on the scale.
Jake Hanley, managing director and senior portfolio specialist at Teucrium, said he expected to approach $4,000 before the end of the month, noting that central banks were sending a clear signal that “gold is strategic.” He told MarketWatch on Monday that bears have had to get out of the way “or continue to risk getting run over.”
Hanley added that while the $4,000 level is important because “humans love big round numbers,” it represents a key extension level based on long-term charts. He added that after gold broke above $2,000 in late 2023, he saw the next target as $4,000.
What’s next for gold?
Aakash Doshi, global head and metals strategy at State Street Investment Management, said that reaching that “round number” would “solidify the 2025 gold-market rally as the strongest since 1979.” He added that for the rally to continue, financial inflows would need to extend beyond $4,000 to support the market.
Doshi also noted that some profit-taking and a pullback could occur, but he expected any decline to be limited to 5% to 7%, and he suggested that dips should be bought. He added that positioning in gold had significant room to expand and it was not an overowned asset.
Hanley said that, for the time being, the bull market appeared to be charging forward at full speed. He added that once reached that $4,000 price target, the market was likely to consolidate as it took a breather and established stronger support levels.
Central banks and ETFs drive gold demand
Goldman Sachs has increased its gold price forecast for December 2026 to $4,900 per ounce, citing ETF inflows and central bank buying as key drivers.
The People’s Bank of China added to its gold reserves for the 11th consecutive month in September. Central banks and gold-backed exchange-traded funds have been among the largest buyers this year.
Federal Reserve interest rate cuts have also provided support for gold prices. Traders are pricing in a quarter-point cut this month, which tends to boost gold since it doesn’t pay interest.
David Chao of Invesco Asset Management recommended overweight positions in gold as a hedge against the US dollar, suggesting that investors hold around 5% of their portfolios in gold.
On the crypto front, David Marcus, CEO of Litespark and former PayPal executive, compared Bitcoin with gold on Monday. He said if Bitcoin were valued like gold, it would be worth $1.3 million per coin.
Gold’s rally has also been fuelled by President Donald Trump’s trade and geopolitical policies, which have driven a 50% surge over the year. Trump’s aggressive moves triggered a flight to safety and a shift away from the dollar.
Spot gold traded at $3,965.90 per ounce as of 1:17 PM Singapore time on Tuesday. The gain puts gold on track for its biggest annual increase since 1979.
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