Investors have moved into gold in response to a weaker dollar, rising inflation, and geopolitical tensions, while central banks and retail buyers have boosted their purchases, increasing overall demand
Mumbai: Gold prices reached $4,000 per ounce for the first time on October 7, 2025, as investors sought stability amid a weaker dollar, global trade tensions and persistent inflation.
Gold futures closed at $4,004.40 per ounce after touching an intraday high of $4,014.60 on October 7. Gold prices have gained about 50% this year as the US dollar index declined by 10% and uncertainty continued around US economic and monetary policy.
Central banks and investors have expanded gold purchases this year. China and other countries have reduced their holdings of US Treasury and shifted to gold following sanctions on Russia in 2022. Retail investors have also turned to gold to protect against inflation and equity market volatility.
The recent rise followed the US Federal Reserve’s first rate cut of the year in September, which lowered the appeal of short-term debt instruments. The federal funds rate currently stands between 4.00% and 4.25%, and markets expect two more reductions before the year ends. The Fed is scheduled to meet again on October 29.
Ray Dalio, founder of Bridgewater Associates, advised investors to hold “something like 15% of your portfolio in gold” stating that debt instruments are “not an effective store of wealth”. He added, “Gold is the one asset that does very well when the typical parts of your portfolio go down.”
Bank of America, however, advised investors to act cautiously as prices approach this level, noting the potential for “uptrend exhaustion” and a possible correction later this year.
Analysts attribute the milestone to ongoing trade tensions, lower interest rates, and uncertainty around US fiscal policies. The record marks a shift in global investor preference toward assets viewed as stable during market disruption.
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