AFP, Hong Kong

Gold prices broke $4,000 on Wednesday for the first time as investors piled into the safe haven over expectations for US interest rate cuts and worries over the US government shutdown.

The rally in the precious metal also came after concerns that a tech-fuelled rally that has sent some equity markets to record highs may have gone too far, fanning talk of an asset bubble.

Traders have been piling into gold all year, pushing it up more than 50 percent since the start of 2025, on the back of a range of issues including global economic uncertainty, Donald Trump’s trade war and geopolitical crises.

Its allure was increased further this week by political turmoil in France, where the prime minister resigned and President Emmanuel Macron’s former premier urged him to resign and call early elections.

Gold -- long considered a go-to in times of uncertainty -- climbed to a high of $4,039.86 on Wednesday, even as the dollar has pushed up against most of its peers in recent days. Silver was also within a few dollars of its own record high.

The closure of parts of the US government is adding to the sense of unease among investors, with key economic data, including on jobs, being postponed and muddying the waters for the Federal Reserve as it tries to decide on its rate plans.

“The rapid rise in gold prices has been supported by rising inflows into (exchange-traded funds) and central bank buying, including solid demand from China, as gold benefits from political, economic, and inflation uncertainty,” wrote Taylor Nugent at National Australia Bank.

And Pepperstone’s Chris Weston said, “funds and global reserve managers want a hedge -- against fiscal recklessness, currency debasement, and unpredictable government policy -- and gold sits squarely at the heart of that movement”.