Gold price surpasses $4,000 for the first time in history…experts 'cautious approach'

International gold prices topped $4,000 for the first time in history. Analysts attribute this to a preference for safe-haven assets amid the temporary U.S. federal government shutdown and the political crisis in France.

On the 8th local time, AFP and Reuters reported that spot gold hit a record intraday high of $4,000.96 per troy ounce. December-delivery U.S. gold futures rose 0.4% to $4,020 per troy ounce, entering the $4,000 range for the first time.

The rise in gold prices is seen as resulting from increased global uncertainty, including the U.S. administration's tariff policies. Investors' demand shifted toward gold, a safe-haven asset.

The U.S. federal government shutdown that began on the 1st of this month is prolonging, and the possibility of further rate cuts by the U.S. Federal Reserve is being considered. The U.S. daily New York Times (NYT) analyzed that gold prices are rising further because other traditional safe-haven assets, such as U.S. Treasury bonds, have lost their appeal.

Political instability in France, which is experiencing severe fiscal deficits, is also believed to have driven demand for gold as a 'safe haven.'

Bloomberg reported that China's central bank, the People's Bank of China, continued to buy gold in September, recording net purchases for 11 consecutive months as gold prices hit record highs.

There are calls for a cautious approach to gold. Bank of America (BoA) warned on the 6th of this month that if the upward momentum in gold weakens, an adjustment or decline could occur.

Giovanni Staunovo, an analyst at Swiss-based global financial firm UBS, also warned to guard against portfolio concentration, telling the AP, "Investors should be aware that gold's volatility can reach 10∼15%."

Jang Ji-min, contributing reporter, Hankyung.com newsinfo@hankyung.com