Gold prices pass US$3,500, hit new highs amid volatility

Investors have sought out a ‘safe haven’ in gold to maintain some semblance of income stability, driving the asset class to its strongest trading levels ever and opening September at a record high of US$3,575 an ounce.

Nigel Green, chief executive of global advisory firm deVere Group, said a perfect storm of “imminent US interest rate cuts, a weakening dollar and unprecedented central bank demand” has helped gold reach unparalleled heights.

 “Gold’s surge into record territory underscores the scale of unease among investors,” he said.

“Currently, we predict the price will reach $5,000 per ounce by the end of the first quarter of 2026. The drivers are already in place and momentum is compounding.”

“Each cut removes oxygen from cash and bonds, leaving gold as the standout alternative. With inflation still running above target and government debt expanding at record speed, investors are seeking a store of value that requires no political guarantees.”

Ahead of the Federal Reserve announcing an expected rate cut this month, Green said investors have turned to the suite of precious metals as safe havens with silver also surpassing USD$40/oz for the first time since 2011.

Central banks have also grown their gold holdings, with the People’s Bank of China adding to its reserves for 22 months in a row and countries in the Middle East and Asia also growing their holdings at the fastest pace in decades.

“We expect this accumulation to continue as sovereigns look to reduce reliance on the dollar,” Green said.

“When overwhelming demand collides with flat supply, there is only one logical direction for price.

“This imbalance will not resolve quickly, which is why we expect gold’s trajectory to remain sharply upward.”

Gold has also managed to infiltrate other corners of the market with private investors, institutions, exchange traded funds (ETFs) and sovereign mints also reaping the benefits of increased appetite.

“Gold thrives in environments where governments appear unpredictable,” Green said.

“Attacks on the independence of the Federal Reserve, erratic trade policy, and spiralling deficits are all elements that erode confidence in fiat currencies. Investors respond by turning to assets that are politically neutral and globally recognised.

“Gold is reflecting today’s reality of high debt, unstable currencies, and structural inflation.”