Spot gold shattered the USD 4k an ounce barrier the first time on Wednesday, hitting a record of USD 4,059 as the US government shutdown pushed its rally to a peak. The precious metal is up more than 50% this year, and 20% since July with its returns now outperforming equities since the start of the century, Bloomberg reported yesterday.

The current US government shutdown is seen as the immediate catalyst, compounding market anxiety from tariffs and geopolitical risks, UBS Global Wealth Management’s commodity analyst Giovanni Staunovo told The Associated Press. The metal’s appeal is also fueled by Federal Reserve interest rate cuts, a weakening USD, and strong, long-term purchasing from central banks worldwide. The US and Western allies’ move in 2022 to freeze about USD 300 bn in Russian foreign assets was the “trigger point” for the gold rally, Staunovo added.

The metal’s rise also reflects growing concerns over government debt, geopolitical risks, and declining confidence in national currencies, Bridgewater Associates founder Ray Dalio told Bloomberg.

Gold-backed ETFs saw their largest inflows in over three years in September, signaling a shift away from overvalued equities toward diversification, Saxo strategist Charu Chanana told Bloomberg. “Gold breaking USD 4k isn’t just about fear — it’s about reallocation,” she said, noting that easing real yields and stretched AI-heavy stocks are fueling renewed investor interest. Dalio echoed this sentiment, describing gold as “a very excellent diversifier” and advising that an optimal portfolio should include around 15%.

Forecasts remain bullish, with strategists at Goldman Sachs raising their 2026 price target to USD 4.9k an ounce from USD 4.5k, citing a “structural shift in reserve management behavior.” Dalio declared gold as “certainly” more of a safe haven than the USD, comparing its recent record-setting rally to the 1970s, when the metal surged amid high inflation and economic instability.

While gold is widely viewed as a hedge against inflation, some analysts urge caution. Staunovo noted that despite its safe-haven reputation, gold remains highly volatile, with price swings of 10-15%. The Commodity Futures Trading Commission also warned that during periods of economic uncertainty, sellers tend to benefit more than buyers.

MARKETS THIS MORNING-

Japan’s Nikkei is leading the gains this morning among Asian markets, inching up 1.3% in early trading after SoftBank’s stock soared on sealing the agreement to buy ABB robotics for USD 5.4 bn. The Shanghai Composite is also inching up 0.6%, while Hong Kong’s Hang Seng is going in the other direction, down 0.3%. Meanwhile, Wall Street futures are unchanged after S&P 500 logged another all-time high yesterday.

ADX

10,130

+0.5% (YTD: +7.6%)

DFM

5,960

+0.3% (YTD: x+15.5%)

Nasdaq Dubai UAE20

4,833

+0.4% (YTD: +16.1%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

3.9% o/n

3.9% 1 yr

TASI

11,559

-0.2% (YTD: -4.0%)

EGX30

37,377

+0.8% (YTD: +25.7%)

S&P 500

6,754

+0.6% (YTD: +14.8%)

FTSE 100

9,549

+0.7% (YTD: +16.9%)

Euro Stoxx 50

5,650

+0.6% (YTD: +15.4%)

Brent crude

USD 65.68

-0.9%

Natural gas (Nymex)

USD 3.32

-0.4%

Gold

USD 4,046.20

-0.6%

BTC

USD 123,134

+1% (YTD: +30.4%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.77

+1.3% (YTD: +8.2%)

S&P MENA Bond & Sukuk

150.67

-0.1% (YTD: +7.7%)

VIX (Volatility Index)

16.3

-5.5% (YTD: -6.1%)

THE CLOSING BELL-

The ADX rose 0.5% yesterday on turnover of AED 2.3 bn. The index is up 7.6% YTD.

In the green: Aram Group (+14.9%), Umm Al Qaiwain General Investment Co. (+10.0%) and Hayah Ins. Company (+8.3%).

In the red: Rapco Investment (-5.6%), Presight AI Holding (-2.6%) and Burjeel Holdings (-2.2%).

Over on the DFM, the index rose 0.3% on turnover of AED 848.2 mn. Meanwhile, Nasdaq Dubai was up 0.4%.

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