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- Gold's record surge past $4,000 shows stock investors may be hedging their optimism</p>
<p>Huileng TanOctober 8, 2025 at 6:59 AM</p>
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<p>Gold tops $4,000 per ounce amid a year of record-setting gains.DAVID GRAY / AFP via Getty Images -</p>
<p>Spot gold prices hit a record $4,000 per ounce, extending the precious metal's stunning rally.</p>
<p>Gold's demand has jumped as geopolitical issues heat up and stocks stay hot.</p>
<p>Western investors have led the gold rally, with significant ETF inflows and surging trading volumes.</p>
<p>Gold prices smashed past $4,000 per ounce late Tuesday, hitting an all-time high that signals investors may be bracing for turbulence ahead.</p>
<p>Spot gold rose to $4,022.87 per ounce at 12:50 a.m. ET on Wednesday, extending a rally fueled by a potent mix of safe-haven flows, expectations of imminent Fed rate cuts, and rising geopolitical anxieties.</p>
<p>The surge may also reflect growing unease about the simultaneous run-up in global stock markets.</p>
<p>"Despite their recent resilience to macro data surprises, we think investors may be positioning themselves for a pullback," the World Gold Council wrote in a Tuesday report.</p>
<p>"This has likely helped support gold demand, as investors look to add safe-haven assets," the WGC added.</p>
<p>Investors hedge while stocks roar</p>
<p>Equities have been on a tear this year, with the S&P 500 and Nasdaq notching record highs, powered in part by the AI boom and expectations of easier monetary policy.</p>
<p>The rally has appeared unstoppable despite a wall of macroeconomic uncertainty, from President Donald Trump's new tariffs on trading partners to expectations of the Federal Reserve's rate cuts and the ongoing US government shutdown.</p>
<p>The foundation for this week's milestone was laid in September, when global physically backed gold ETFs recorded their largest monthly inflow, resulting in the strongest quarterly inflow on record of $26 billion. By the end of the third quarter, assets under management reached a record $472 billion — up 23% from the second quarter.</p>
<p>Gold rallies were typically led by Eastern buyers in China and India who hoarded the yellow metal as a store of value and for cultural reasons.</p>
<p>This time, the rally is driven overwhelmingly by Western investors.</p>
<p>North American funds accounted for $16.1 billion in inflows during the third quarter, while European funds contributed $8.2 billion. Asia, by contrast, contributed $1.7 billion.</p>
<p>"Flows reflected both protection and momentum as investors sought a purchasing-power hedge and leaned into the breakout," wrote WGC.</p>
<p>Trading activity exploded alongside prices.</p>
<p>In September, global gold trading volumes jumped 34% from August, averaging $388 billion a day — the second-strongest month of the year.</p>
<p>The fear trade's comeback</p>
<p>Gold's stunning 2025 rally has now sent spot prices up about 53% year-to-date, reigniting the "fear trade" that had cooled in previous years.</p>
<p>On Monday, Goldman Sachs raised its December 2026 gold forecast to $4,900 per ounce from $4,300, citing strong inflows into Western gold ETFs and central bank demand.</p>
<p>Some prominent investors have been sounding the same note.</p>
<p>Wall Street gurus, including Ray Dalio and David Einhorn, have urged investors to hold gold as a hedge against both inflation and policy volatility.</p>
<p>But not everyone is cheering.</p>
<p>On Monday, Citadel CEO Ken Griffin told Bloomberg he was uneasy about the flight to gold as a safe-haven asset because it reflects a broader derisking from the dollar, a traditional haven currency.</p>
<p>Meanwhile, Bank of America analysts cautioned that gold's parabolic rally could be nearing exhaustion.</p>
<p>on Business Insider</p>
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