Gold Hits $4,000 Record on Geopolitical Risk, Market Highs and US Gov Shutdown

Stock markets setting record highs, geopolitical risk in Europe, Ukraine, Russia, Israel, Gaza, China, Taiwan, and North Korea, not withstanding Trump trade tariffs and the US government shutdown, gold prices have been on their biggest ‘bull run’ since the early and mid-1970s.

Gold hit $4,000 (£2,985) an ounce this afternoon.  With global uncertainty, fears for stock market corrections or even a crash, many are looking at locking in gains made over the last 18 months.

A common ‘safe haven’ is cash but with inflation devaluing cash, in particular when central banks such as the Federal Reserve, the Bank of England and the European Central Bank, cut interest rates again, which they are likely to do in the next 6 weeks or so, inflation may then be higher that cash rates and you really are then devaluing your investments.

This is why gold prices have surged.

Comment

‘Has the horse already bolted?’

We suggest it probably has, when the US Budget is agreed by Congress and the US government opens again, gold will fall back.  In addition, if peace is agreed between Israel and Hamas, gold will fall back.  If inflation remains stubborn and interest rates may remain high, this may attract people back to cash.

But, and it’s a big ‘but’, if things get worse in Gaza, Ukraine or indeed other conflicts take shape around the world, investors may still flock to gold and other precious metals, driving prices up even further.  If the US budget is not passed and government departments remain closed for longer, gold with climb.

Worth a Read/Watch: Should I Invest in Cash?