The yellow metal, long lauded as a safe haven asset, experienced another bout of extreme volatility this week. The metal’s rally was amplified by heightened geopolitical uncertainty and rising safe-haven demand, with spot prices exceeding the $4,000-mark last week for the first time in history.
Spot gold briefly crossed the $4,015-per-ounce mark and U.S. futures rallied sharply, lifting their year-to-date increase to over 50%.
A softer U.S. dollar and expectations of continued monetary easing further supported the rally, as investors looked for protection against global economic risks, including the potential for a U.S. government shutdown and broader market volatility.
The U.S. government shutdown persists, with no resolution in sight. This lack of agreement has limited investors’ access to crucial economic data, complicating the Federal Reserve’s assessment of the broader economy.
Market participants are still pricing in 25-basis-point rate reductions in October and December, with probabilities of roughly 93% and 82%, respectively. Political developments in France and Japan are adding further fiscal concerns, while China’s central bank continued to expand its gold reserves for the 11th consecutive month in September.
Overall, gold has gained about 51% year-to-date, driven by strong safe-haven demand, expectations of Fed easing, continued central bank purchases, rising inflows into gold ETFs, and a softer U.S. dollar.
The Benefiters From Gold Rally
In 2025 alone, central banks added more than 166 tonnes of gold in Q2, building on a Q1 total of 244 tonnes, although that modestly trails last year’s record purchases. Also, in August 2025, global central banks increased their gold holdings by a net 15 tonnes, resuming purchases following a lull in July. This level of buying is consistent with the net monthly acquisitions seen from March through June 2025.
Over the past month, gold futures have risen 9.7% from their opening level of $3,567.80 on September 5. On a year-over-year basis, the metal has gained around 47%, up from its opening price of $2,656 on October 4, 2024.
Gold’s surge to record levels comes alongside strength in equities and Bitcoin. The S&P 500 and Nasdaq climbed recently, supported by optimism surrounding artificial intelligence-related mergers and acquisitions, despite the U.S. government shutdown entering its sixth day. Both indexes closed at record highs, while the Dow Jones Industrial Average edged slightly lower.
The GCC’s Role in the Gold ETF Landscape
Rising gold prices are enhancing the attractiveness of gold ETFs, offering investors in the GCC a liquid, exchange-traded, and secure alternative to holding physical gold. Their accessibility and lower custody costs make them an increasingly popular option among contemporary investors.
Among the GCC region, Saudi Arabia stands out, with demand for gold bars and coins climbing 15% year over year in Q1 2025, according to WGC data. Gold is continuing to attract investor interest, with the Albilad Gold ETF (9405) in Saudi Arabia benefiting from this global trend.
Founded in 2020, Albilad Gold ETF is the first Shariah-compliant gold ETF in the region. This open-ended fund is designed to simulate global gold prices, providing a way for investors to access the physical gold market and offering the flexibility of buying and selling through the Saudi Stock Exchange (Tadawul).
The upward trend in gold prices has boosted the performance of prominent exchange-traded funds (ETFs) globally – VanEck Gold Miners ETF (GDX), SPDR Gold Trust (GLD), and the Albilad Gold ETF, which escalated around 122%, 48% and 53%, respectively, on year-to-date basis.
By August 2025, gold-backed ETFs worldwide held roughly 3,692 tonnes of gold*, with total assets under management (AUM) totalling about $407 billion. This represented a notable rise compared with the prior month, driven by fund inflows and higher gold prices.
Looking Ahead
Market observers remain broadly positive on gold’s outlook. Expectations of further rate cuts, ongoing geopolitical tensions, and a steady appetite for safe-haven assets are likely to underpin demand in the coming months. Still, volatility could persist as investors watch for new inflation data and policy signals from the Fed, which could influence sentiment and near-term pricing dynamics.
On October 6, Goldman Sachs increased its gold price forecast for December 2026 to $4,900 per ounce, up from $4,300, driven by robust inflows into Western ETFs and anticipated central bank purchases.
Overall, gold’s record-breaking surge underscores how monetary policy expectations and global uncertainty continue to drive investor behavior. While the recent dip may give traders pause, many see it as a temporary breather — and potentially a buying opportunity within a longer-term bullish trend.
Gold’s record climb above $4,000 highlights its lasting appeal as a safe-haven asset and store of value. Though short-term pullbacks may occur, analysts expect supportive macroeconomic conditions to sustain the metal’s strength into 2026.
*Data sourced from Yahoo finance, Reuters, AP News.
