Gold futures rise above $4,000 per ounce for the first time

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NEW YORK (AP) — Gold futures have soared above $4,000 per troy ounce for the first time, as many investors seek a safe place to park their money as the U.S. government shutdown continues.

Gold futures in New York jumped above the $4,000 mark Tuesday morning, reaching a record high. The going price for New York spot gold had previously closed at $3,960.60 per troy ounce — the standard for measuring precious metals — on Monday.

Gold sales can rise sharply when anxious investors seek secure investments for their money. Even before the shutdown, the asset — and other metals, like silver — had seen wide gains over the last year, as President Donald Trump ’s barrage of tariffs cause uncertainty around the outlook for the global economy. More recently, the prospect of lower interest rates has also made gold a more attractive investment than interest-bearing investments.

Gold futures are up about 50% since the start of 2025 — trading as high as $4,013 per troy ounce by late morning Tuesday, before falling back just below $4,000 in the early afternoon.

Silver has seen an even bigger percentage jump year to date. Silver futures are up about 60%, trading at close to $48 per troy ounce Tuesday morning.

A lot of it boils down to uncertainty. Interest in buying metals like gold typically spikes when investors become anxious.

Much of the recent economic turmoil has spanned from Trump’s trade wars. Since the start of 2025, steep new tariffs the president has imposed on goods coming into the U.S. from around the world have strained businesses and consumers alike — pushing costs higher and helping to weaken the job market. As a result, hiring has plunged while inflation has inched back up. And more and more consumers are expressing pessimism about the road ahead.

The U.S. government shutdown has added to those anxieties. Key economic data has been delayed — and scores of federal employees are already feeling the effects of furloughs and working without pay as long as the shutdown lasts, which has no immediate end in sight. Trump has also threatened to use the shutdown to conduct mass firings and perhaps permanently shutter offices in attempt to punish Democrats for voting down GOP legislation.

Giovanni Staunovo, commodity analyst at UBS Global Wealth Management, also points to continued weakness of the U.S. dollar and renewed rate cuts from the Federal Reserve. Last month, the Fed cut its key interest rate by a quarter-point — and projected it would do so twice more this year.

Investments in gold have also been driven by other factors over time. Analysts have previously pointed to strong gold demand from central banks around the world — including amid heightened geopolitical tensions, such as the ongoing wars in Gaza and Ukraine.

“The gold rally started in 2022,” Staunovo said via email on Tuesday. He noted that the “trigger point” was when the U.S. and other Western allies moved to freeze around $300 billion of Russian foreign holdings at the beginning of the war in Ukraine.

Many jewelry merchants and dealers have increasingly reported surges in customers looking to check the value of gold they own — sometimes opting to melt or sell family heirlooms to cash in on the precious metal's rising price.

At the same time, those in the market for gold jewelry may be feeling “sticker shock” if they can’t afford certain products anymore — particularly if it's something impacted by both rising material costs and tariffs.

Larger retailers like Pandora and Signet, whose brands include Zales and Kay Jewelers, have acknowledged these headwinds in recent earnings calls.

“If I’m a guessing man here, we will see a general price rise for the category,” Pandora CEO Alexander Lacik said in an August earnings call, pointing to rising costs of gold and silver, as well as tariffs, industrywide.

Advocates of investing in gold call it a “safe haven” — arguing the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road as a hedge against rising inflation. Some also take comfort in buying something tangible that has the potential to increase in value over time.

Still, experts caution against putting all your eggs in one basket. And not everyone agrees gold is a good investment. Critics say gold isn’t always the inflation hedge many claim — and that there are more efficient ways to protect against potential loss of capital, such as derivative-based investments.

“Gold is perceived by many market participants as a safe haven asset. But investors need to be aware it has a volatility of 10-15%,” Staunovo noted. He added that smaller amounts of physical gold, such as gold coins or 1-gram bars, have larger ranges between buying and selling prices.

The Commodity Futures Trade Commission has also previously warned people to be wary of investing in gold. Precious metals can be highly volatile, the commission said, and prices rise as demand goes up — meaning “when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers.”

The commission added that it's also important to be cautious of potential scams and counterfeits on the market.

The frenzy for gold has also resulted in health and environmental consequences — with officials pointing to rising demand for mercury, a toxic metal that is key in illegal gold mining worldwide.

Mercury is widely used to separate gold during artisanal or small-scale mining. But it pollutes water, accumulates in fish, makes its way into food and builds up in people’s bodies, leading to neurological and developmental harm. Even small-scale exposure can carry serious risks — putting in danger workers who rely on the industry, as well as residents in affected areas more broadly.

The Associated Press has reported about the effects of mercury poisoning tied to gold mining in countries like Senegal, Mexico and Peru, among other parts of the world.