Gold prices shatter record as investors in 'full-blown panic' pour into precious metals

Gold prices have reached the $4,000 (£2979) per ounce mark for the first time on Tuesday as investors seek a "safe haven" amidst the ongoing US government shutdown.

The price of gold at the New York Stock Exchange soared past the $4,000 threshold just after the stock market opened that morning. The closing price for New York spot gold was previously reported at $3,960.60 per troy ounce, the standard measure for precious metals, on Monday.

Gold prices typically surge when investors, driven by anxiety about the economy, look for secure investments. Prior to Tuesday, this asset, along with other metals like silver, had seen significant gains over the past year, largely due to President Donald Trump's imposition of tariffs, which has caused global economic uncertainty.

Since the start of 2025, gold futures have risen about 50 per cent, trading at a new high of around $4,003 per troy ounce by around 9.30am on Tuesday. This represents a substantial increase from the roughly $2,670 (£1,989) seen at the start of January.

Much of this can be attributed to uncertainty. Interest in purchasing metals like gold typically spikes when investors become anxious.

The recent economic upheaval has largely been attributed to Trump's trade wars. Since the beginning of 2025, the president's hefty new tariffs on goods entering the U.S. from around the globe have put a strain on businesses and consumers alike - driving up costs and weakening the job market.

Consequently, hiring has plummeted while inflation continues to creep back up. Increasingly, consumers are voicing their pessimism about the future.

The ongoing US shutdown is exacerbating these anxieties. Crucial economic data has been delayed, and countless federal employees are already experiencing the impact of furloughs and working without pay for the duration of the shutdown, which has no immediate end in sight.

Trump has also threatened to use the shutdown to carry out mass redundancies and potentially permanently close offices in an attempt to penalise Democrats for rejecting GOP legislation.

The extent of the impact could depend on how long the deadlock lasts. Wall Street, meanwhile, has so far remained largely unaffected by the shutdown - but Treasury yields fell following disappointing hiring data from ADP Research on Wednesday.

Investments in gold have also been influenced by other factors over time. Analysts have previously highlighted strong gold demand from central banks worldwide - including amid escalating geopolitical tensions, such as the ongoing conflicts in Gaza and Ukraine.

Advocates of investing in gold label it a "safe haven" - arguing that the commodity can diversify and balance your investment portfolio, as well as mitigate potential risks down the line. Some also find solace in purchasing something tangible that has the potential to appreciate over time.

However, experts warn against putting all your eggs in one basket. And not everyone concurs that gold is a sound investment.

Critics argue that gold isn't always the inflation hedge many claim it is - and that there are more efficient methods to safeguard against potential capital loss, such as derivative-based investments.

The Commodity Futures Trade Commission has also previously cautioned individuals to be sceptical of investing in gold. Precious metals can be highly volatile, the commission stated, and prices escalate as demand increases - meaning "when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers."

And even gold's current rally has experienced some volatility. While still up significantly overall since the beginning of the year, there have been a few short periods with losses.

For instance, gold prices dipped for several days following Trump's sweeping "Liberation Day" announcement on 2 April.

If you decide to invest in gold, the commission advises, it's crucial to educate yourself on safe trading practices and be wary of potential scams and counterfeits on the market.