Fake gold bars piled up in Clermont-Ferrand France on March 25 2025.
Romain Costaseca | Afp | Getty Images
Gold prices hit $4,000 for the first time Tuesday as investors seek a safe haven from geopolitical volatility, economic uncertainty and stubborn inflation.
Gold futures were last trading at $4,005.80 per ounce. Prices have gained more than 50% this year as President Donald Trump upends the global trade system and threatens the independence of the Federal Reserve.
Central banks and retail investors are buying gold at a strong clip. Countries like China are diversifying away from U.S. Treasurys and into gold after Washington imposed stiff sanctions on Russia over its invasion of Ukraine. Retail investors, meanwhile, are looking for protection against inflation.
The precious metal has recently taken a leg higher after the Fed cut interest rates in September, making debt instruments like bonds less attractive to investors. The market is expecting two more rate cuts this year.
Ray Dalio, founder of Bridgewater Associates, recommended Tuesday that investors put “something like 15% of your portfolio in gold.” Debt instruments are “not an effective store of wealth,” Dalio said at the Greenwich Economic Forum in Connecticut.
Gold is “the one asset that does very well when the typical parts of your portfolio go down,” he said.
Bank of America urged investors on Monday to approach gold cautiously as prices were heading toward $4,000. BofA warned clients that gold faces “uptrend exhaustion,” which could lead to “a consolidation or correction” in the fourth quarter.
— CNBC’s Yun Li contributed to this report.