The metal’s rally has been driven by a combination of factors, including expectations of interest rate cuts, ongoing political and economic uncertainty and solid central bank buying

Gold pushed through $4,000 an ounce to hit a record on Wednesday, driven by investors seeking safety from mounting economic and geopolitical uncertainty.

Spot gold was up 0.9% at $4,017.16 per ounce by 0442 GMT.

Traditionally, gold is seen as a store of value during times of instability. As one of the best-performing assets of 2025, spot gold is up 53% year-to-date after rising 27% in 2024.

Political turmoil in France and Japan has boosted demand for the safe-haven bullion.

The latest leg higher has been sparked by the election of Sanae Takaichi over the weekend and the prospect of deeper deficit spending in Japan. That itself ties into a key theme at the moment: the ‘run it hot’ trade, said Capital.com analyst Kyle Rodda.

There’s so much faith in this trade right now that the market will look for the next round number which is 5,000 with the Fed (U.S. central bank) likely to continue to lower rates, said Tai Wong, an independent metals trader.

There will be some bumps in the road like a lasting truce in the Mideast or Ukraine but the fundamental drivers of the trade, massive and growing debt, reserve diversification, and a weaker dollar are unlikely to change in the medium term.

The metal’s rally has been driven by a combination of factors, including expectations of interest rate cuts, ongoing political and economic uncertainty, solid central bank buying, inflows into gold exchange-traded funds and a weak dollar.

Rising uncertainty levels tend to fuel gains in the gold price and we are seeing this theme play out again, said KCM Trade Chief Market Analyst Tim Waterer.