Weekly Buzz: Will gold hit the US$4,000 mark?

03 October 2025

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Gold has hit yet another record high, trading at about US$3,860 per ounce as investors pile into the safe-haven asset. The precious metal is now up more than 45% year-to-date, extending a rally that shows no signs of slowing down. So, is gold now set to hit the US$4,000 mark?

What’s fuelling the rally?

Gold’s stellar performance reflects mounting concerns across multiple fronts. Trade tensions continue to worry markets and weigh on the outlook for global economic growth. In the US, inflation remains sticky at 2.9%, even as the Federal Reserve signals more rate cuts as early as October. This combination makes gold particularly attractive as it tends to benefit from both inflation fears and falling yields.

Central banks have been consistent buyers of gold throughout 2025, with China leading the charge. These institutions have been diversifying away from US Treasuries as reserves, snapping up around 900 tonnes this year according to J.P. Morgan estimates. Investor appetite mirrors this institutional demand. Gold-backed ETFs have pulled in close to US$50 billion in inflows so far this year, their second-strongest performance on record according to the World Gold Council.

What this means for you

While the structural factors supporting gold remain intact, gold has become a crowded trade: 41% of global fund managers consider it the most popular position, according to Bank of America’s survey. Easing tensions or a rebound in the US dollar could trigger short-term profit-taking. For now, ongoing uncertainty and sustained demand from both institutional and retail investors keep gold firmly in the spotlight.

For long-term investors, gold's role extends beyond just hedging against crises. The precious metal serves as a powerful ballast against both market volatility and inflation. Our General Investing portfolios include gold as part of a diversified asset mix, positioning it as a strategic allocation to weather different market conditions over the long term.

Investor’s Corner: Why emerging markets are back in focus

US markets usually take centre stage. Strong returns, a rising dollar, and tech dominance make them hard to beat. 2025 challenged that narrative: global equities excluding the US are up around 16% this year, while the US dollar has weakened by about 10%. Global investors looking to rebalance away from heavily concentrated US positions are now looking towards other regions, like China.

The CSI 300 Index, which tracks China’s large-cap stocks, is near its highest level in over three years. Tech names have led the rally, fuelled by AI breakthroughs (think Deepseek) and clear policy signals from Beijing. China's retail investors have also piled in – they account for roughly 90% of daily trading. There’s also plenty of room to go here: Chinese households are sitting on over 160 trillion yuan (US$22 trillion) in savings, with just 5% allocated to equities.

A weaker US dollar is lifting emerging markets overall. It makes their exports more competitive, eases debt burdens, and gives consumers more spending power. Combine that with global demand for AI and clean tech – sectors where China plays a major role – and you start to see why it’s now a macroeconomic environment that highlights the value of global diversification.

(Check out Flexible Portfolios for an easy way to capture opportunities in emerging markets worldwide.)

This article was written in collaboration with Finimize.

Simply Finance: Safe-haven assets

Safe-haven assets are investments that hold their value when markets start to worry. Gold is the classic example: its demand tends to rise when market uncertainty spikes and investors seek protection. Government bonds from major countries like the US also serve this role, as do certain currencies like the Japanese yen and Swiss franc.


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