Spot gold prices broke through $4,000 per ounce for the first time on Wednesday (October 8), as market concerns about the US economy and the government shutdown added further momentum to the gold rush.

Gold prices rose as much as 0.5% to $4,006.1 per ounce. This is a milestone—just two years ago, gold prices were below $2,000, and today's returns far exceed the stock market's performance this century.

Gold prices have jumped over 50% this year amid questions about the outlook for global trade, the independence of the Federal Reserve, and the stability of US fiscal policy. Meanwhile, geopolitical tensions have boosted safe-haven demand, and central banks continue to increase their gold holdings at an accelerated pace.

The urgency of the gold price rally has taken on new urgency as investors seek protection against potential market shocks following the US government funding impasse. Furthermore, the Federal Reserve's monetary easing cycle has provided support for gold, which does not generate interest. Investors have been flocking to gold-related exchange-traded funds (ETFs), with those backed by physical gold seeing their largest monthly inflows in more than three years in September.

"Gold's move above $4,000 isn't just driven by panic, but rather reflects a reallocation of assets," said Charu Chanana, market strategist at Saxo Capital Markets Pte. "With stagnant economic data and looming expectations of rate cuts, real yields are falling, while artificial intelligence-focused stocks appear overvalued. Central banks laid the foundation for this rally, and now retail investors and ETFs are driving the next leg."