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Intl. gold prices exceed $4,000 per troy ounce for the first time, rise expected to continue

Published: 08 Oct. 2025, 20:33

Gold bars are displayed at the Korea Gold Exchange office in Jongno, central Seoul on Oct. 8. [NEWS1]

International gold prices surged past $4,000 per troy ounce for the first time in history, driven by growing investor preference for safe-haven assets amid the ongoing U.S. government shutdown and political instability in France and Japan. In Korea, the price of one don (3.75 grams) of pure gold also exceeded 800,000 won ($561).

On Tuesday in New York, gold futures for December delivery closed at $4,004.40 per ounce, up 0.7 percent from the previous day. Prices briefly reached $4,013.10 during the session, setting a new record. By 1:30 a.m. on Wednesday Korea time, the price had risen above $4,055. In Seoul, the Korea Gold Exchange listed the price of one don of gold at over 810,000 won, a significant jump from the 770,000 won range before the Chuseok holidays.

Gold, traditionally seen as a safe-haven asset, has jumped more than 50 percent this year, fueled in part by tariffs imposed under the Trump administration. The recent political and economic turbulence in major economies has continued to push gold prices upward. The U.S. federal government shutdown has lasted over a week, and expectations for an interest rate cut by the U.S. Federal Reserve have added momentum.

Unrest in France and Japan has also rattled markets. In France, a newly appointed prime minister stepped down in less than a month after failing to reach a budget agreement amid the country’s fiscal crisis. In Japan, the Liberal Democratic Party suffered a major defeat in the upper house elections, positioning Sanae Takaichi — the party’s new leader, often referred to as the “female Abe” for her support of Abenomics — as the de facto next prime minister. Her plans to pursue both interest rate cuts and fiscal easing have heightened investor anxiety.

The political shake-ups in France and Japan are adding to fiscal concerns and contributing to the rally in gold, according to Nicky Shiels, the head of research and metals strategy at MKS Pamp SA. A mix of retail demand, especially in Europe and Japan, and institutional inflows has driven the latest surge, she said.

“It’s very much like the early ’70s,” said Ray Dalio, the founder of the world’s largest hedge fund Bridgewater Associates. “Gold is the only asset that somebody can hold, and [that] you don’t have to depend on somebody else to pay you money for,” he said, adding that gold is the safer investment choice than dollars.

Gold bars are on display at a gold exchange office in Seoul on Oct. 2. [NEWS1]

With no quick resolution in sight to the ongoing political and economic uncertainty, analysts expect gold's rise to continue. Goldman Sachs recently raised its price forecast for December next year from $4,300 to $4,900 per ounce, citing sustained central bank purchases and inflows into Western exchange-traded funds. In a survey conducted by the World Gold Council in June, 43 percent of central banks said they planned to increase gold holdings within the next year — a rise of 14 percentage points from the previous year.

The People’s Bank of China, in particular, increased its gold reserves for 10 consecutive months as of August, making it one of the largest buyers globally. In the past three years, China has purchased more than three times the amount held by the Bank of Korea, which currently holds 104.4 tons.

Reuters noted that the rally has also been fueled by a “fear of missing out,” or FOMO, as investors worry about being left behind in a one-sided market.

“We are now seeing increased appetite from Western investors, both institutional and retail, as a case of 'FOMO' kicks in. [...] Should this trend continue, we would not be surprised to see gold prices break above $4,000/oz,” SP Angel analysts said in a note, as quoted by Reuters.

Still, concerns are emerging that gold may be nearing a peak. Bart Melek, the head of commodity strategy at TD Securities, warned, “Given the speed and magnitude of the rally since mid-August, there’s a risk that speculators may be tempted to take some profits.”

Bloomberg columnist Allison Schrager emphasized that “gold is not a risk-free asset,” citing the 6 percent fall in prices during the 2008 global financial crisis. Giovanni Staunovo, an analyst at global financial firm UBS, said gold’s volatility currently ranges between 10 and 15 percent.

How much gold are billionaires allocating in their portfolios? Ray Dalio suggested that around 15 percent is appropriate from a strategic asset allocation perspective. Jeffrey Gundlach, known as the “Bond King” on Wall Street, said even up to 25 percent is not excessive.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YU-MI [[email protected]]