Gold crashes through $US4000 an ounce for first time, extends scorching run

A riskier, uncertain world is expected to extend gold’s scorching run over the next few years after the precious metal crashed through $US4000 an ounce for the first time. While gold’s 54 per cent rise in 2025 has inflated the value of bullion reserves, sent mining stocks soaring, sparked an exploration rush that is reviving mothballed gold mines and triggered a buying blitz at Perth Mint, there’s no escaping that the metal’s bull runs are driven by global political and economic worries that push investors into safer assets. Gold prices cracked $US1000/oz in 2009 during the Global Financial Crisis, $US2000/oz in mid-2020 after the arrival of COVID-19, and $US3000/oz when new US President Donald Trump announced his tariffs in April. On Wednesday the spot price of the metal leapt more than $US50/oz in Asian trading to a hit a record $US4040.48/oz. That’s up 10.5 per cent in the past month alone on a cocktail of factors, including increased buying by central banks, concerns about the US Government shutdown, a weakening US dollar, growing US debt and renewed geopolitical worries in Europe and Japan that have added to long-standing worries about global trade and Russia’s war with Ukraine. The Australian-dollar gold price also hit a record, adding more than $140/z to a peak of $6153.10/oz. And pundits reckon that while prices may retreat in the short term, there’s enough lingering global worries to keep gold rising until at least the end of next year. Investment banking giant Goldman Sachs is now forecasting gold will reach $US4900/oz by December 2026, up from its previous forecast of $US4300/oz, citing inflows into gold exchange traded funds and the falling US dollar. Kenneth Wan, a portfolio manager at Drummond Knight Asset Management — a Sydney-based resources-focused investor with $3 billion under management — said gold stocks were still cheap, despite adding more than 116 per cent this year to be the world’s best performing asset class. “Long term consensus prices for gold equities are still only around $US2800 or $US2900 per ounce at the moment,” Mr Wan said. “So unless you think the gold price has already run too far and can’t sustain these levels for a while, then you would say that gold stocks remain relatively undervalued. “Bull markets for gold have historically run for about five to seven years. We’re currently only about three years into the current bull market. “It’s tempting to take some profits off the top but I’m not seeing any reason to fully cash out. The long-term view for gold remains good, the factors that have driven the price rises haven’t gone away.” Capital.com analyst Kyle Rodder said there was “reason to believe gold is due a pullback”. “The intense interest and media focus on the commodity may be a contrarian indicator,” Mr Rodder said. “However, in the long run, the factors driving gold remain significant tailwinds. Gold will likely trend higher until one, or more likely several, of the tailwinds turn.” That’s a view supported by Perth stockbrokers and corporate advisers who have raised billions for gold and other mineral companies in the past year. Argonaut, which is coming off a record profit, now sees gold peaking at $US4500/oz by the end of 2027 off the metal’s “ever-improving backdrop”, benefiting miners of the commodity. “The more bullish outlook has driven material earnings and price target upgrades, particularly for the larger, longer-life producers,” analysts Hayden Bairstow and Patrick Streater said. Euroz Hartleys, which bases its price assumptions on consensus forecasts, sees “considerable upside” for miners. “We are particularly excited about the upcoming September quarterly reporting period; no surprise that we are expecting record cashflows across the sector, especially given that costs are under control, leading to further production growth but also increased shareholder returns,” analyst Michael Scantlebury said. Canaccord Genuity said it expected companies “demonstrating consistent cash generation, growing production profiles, and/or a free cash flow inflection point to outperform”. The gold boom is attracting younger investors, who are not just splashing out on gold stocks, but on the physical metal. “For example, younger people building a portfolio or those managing one for retirement are thinking about the role gold could play as a defensive asset or a store of wealth,” Gemma Dale, director of self-managed super funds and investor behaviour at NAB’s Nabtrade division, said. “Gold fell out of favour with investment advisers and retail investors some decades ago, so this resurgence is notable,” Ms Dale said. Her comments were borne out by the Perth Mint’s latest data, which show its sales of gold coins and minted bars in September rose 21 per cent over August to be up 11 per cent over the past three months. Also, weekly visitor numbers have nearly doubled, from an average of 5000 to more than 9000. “Traditionally, as gold prices climb, we see retail investors hesitate to buy,” the mint’s general manager, retail, Tina Kircher said. “But this time, customers are undeterred. People are buying gold as both a safe haven and a long-term store of value.”