Gold prices broke through a historic milestone on Tuesday, Oct. 7, topping $4,000 an ounce for the first time ever as political gridlock in Washington stretched into a seventh day of a partial government shutdown.

Futures for the precious metal briefly traded at $4,006 around 11 a.m. ET before dipping slightly and quickly regaining ground. The rally marks a stunning 50% rise in gold prices so far this year.

The surge comes as the U.S. dollar continues to weaken and inflation pressures persist. According to data from CME Group, the dollar has fallen about 10% year to date, while inflation is running at 2.9% — still above the Federal Reserve’s 2% target. With the value of cash eroding, many investors are turning to gold as a hedge against inflation and currency depreciation.

Why Gold Is Climbing

Gold has long been seen as a safe haven in uncertain times, and the current mix of inflation, political instability, and shifting global trade dynamics has only strengthened its appeal. Both institutional investors and retail buyers are increasing their gold holdings, while central banks — including China’s — are reducing their reliance on U.S. Treasurys. That trend has accelerated since President Donald Trump imposed sanctions on Russia in response to its 2022 invasion of Ukraine.

At the Greenwich Economic Forum, Bridgewater Associates founder Ray Dalio emphasized gold’s role as a stabilizing force in portfolios. “Gold is an excellent diversifier,” he said. “It’s one of the few assets that performs well when the traditional parts of your portfolio struggle.”

How to Invest in Gold

Investors can gain exposure to gold in several ways, including buying physical bullion, investing in gold-backed exchange-traded funds (ETFs), or trading futures contracts. With uncertainty still clouding the global economic outlook, many analysts expect gold to remain in demand — and potentially climb even higher — in the months ahead.

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