ISLAMABAD: Gold prices soared to historic highs Wednesday, with the precious metal trading above $4,500 per ounce as investors sought refuge amid escalating geopolitical tensions and mounting concerns over global economic stability.
Price of gold reached $4,495.34 per ounce, according to the World Gold Council, while COMEX gold futures climbed to $4,521.20, up $15.50 or 0.34% from Monday's close of $4,516.70. The contract hit an intraday high of $4,555.10 before settling back.
The increase represents a dramatic shift in the gold market, driven by what the World Gold Council describes as "shifting global fundamentals" rather than speculative trading.
Central banks emerged as major buyers for the third consecutive year, with China, Turkey, Poland and India collectively purchasing more than 1,000 tonnes annually. The buying spree reflects a strategic move by governments to diversify reserves away from US dollar-denominated assets.
Western institutional investors also returned to gold after years of exodus from the market. Gold-backed exchange-traded funds recorded more than $77 billion in inflows during 2025, adding over 700 tonnes to global holdings by year-end, according to World Gold Council data.
The market development organization, whose quarterly reports serve as the industry standard used by central banks, the International Monetary Fund and major financial institutions, cited multiple factors behind gold's rally.
Ongoing conflicts in Eastern Europe and the Middle East, combined with recent US naval actions involving Venezuelan-linked tankers, have intensified demand for assets perceived as safe stores of value. Trade policy uncertainty and tariff disputes have further amplified gold's appeal as a hedge against systemic economic shocks.
Growing doubts about US fiscal stability, with national debt surpassing $40 trillion, have prompted investors to question the long-term role of Treasury securities in their portfolios. Gold has emerged as what analysts call the "preferred diversifier" in an increasingly uncertain financial landscape.
The Federal Reserve's anticipated rate cuts throughout 2026 have also improved gold's relative attractiveness. Lower interest rates reduce the opportunity cost of holding non-yielding bullion compared to bonds.
Other precious metals posted gains alongside gold. Silver rose 1.66% to $72.315 per ounce, while platinum jumped 2.14% to $2,336.40. Palladium edged up 0.52% to $1,966.00, according to COMEX trading data.
The World Gold Council characterized 2025's price performance as a fundamental market shift rather than a temporary spike, stating that gold has "reasserted its historic role as the ultimate store of value" amid currency realignment and geopolitical volatility.
