Topline
The value of U.S. gold hit another record high on Tuesday, surpassing the $4,000 threshold for the first time, as economists praised the precious metal as a safe-haven investment in the wake of a government shutdown, a declining job market and steady inflation.
U.S. gold futures, used by investors to hedge positions, surged to around $4,005 per troy ounce Tuesday on the New York Mercantile Exchange.
Goldman Sachs commodities strategist Lina Thompson wrote as gold prices started surging earlier this year that investors favor the precious metal amid periods of “elevated” economic and policy uncertainty in the U.S., as the value of gold hit $3,000 for the first time in March as President Donald Trump escalated trade negotiations before imposing his broader tariffs in April.
Gold rose above $3,900 to a new record earlier this month after the Senate failed to approve legislation that would stave off a federal government shutdown, leading to a decline in riskier assets like bitcoin and equity.
Adam Turnquist, chief technical strategist for LPL Financial, wrote Tuesday the latest rally for gold is “underpinned” by growing uncertainty over the government shutdown, while a weaker U.S. dollar, heightened hopes for the Federal Reserve to lower interest rates, and “tariff-related inflation angst” have boosted the precious metal so far this year.
Gold prices tend to coincide with declining value for the U.S. dollar and long-term Treasury yields, which have declined 4.6% and 3.6% in recent months, respectively.
Hedge fund billionaire Ray Dalio said Tuesday that gold is “the one asset that does very well” when other investments perform poorly, arguing traders should put “something like 15% of your portfolio in gold.”
Analysts at Goldman Sachs, which previously set a $3,000 price target for gold by the middle of 2026, raised its price forecast for December 2026 to $4,900, up from $4,300. Wall Street did not anticipate gold’s value to rally so high this year, after JPMorgan Chase forecast a $2,950 price target for year’s end in February, while Citigroup projected end-of-year growth up to $3,000, a threshold that gold surpassed in March.
Bank of America analysts wrote Monday that gold could face “uptrend exhaustion” as prices rose near $4,000, potentially resulting in a “consolidation or correction” later this year that could disrupt new investors in the precious metal.
This is a developing story.