Gold Breaks $4,000: Momentum Meets Madness in Record-Setting Rally

Gold’s blistering rally showed no signs of cooling last week, as the metal surged to a historic high above US$4,000/oz, up over $100 (+2.2%) since early October and nearly $400 in the past month. Silver and platinum joined the momentum, climbing $3/oz and $100/oz, respectively. With Chinese markets reopening after Golden Week, traders are watching closely to see whether Asian demand joins the Western-driven FOMO rally. 

The move has been remarkable in pace Gold gained $500 in just 25 days, the fastest advance of this cycle—driven by heavy ETF inflows, persistent US political turmoil, and expectations of further Fed rate cuts. Global gold-backed ETFs saw US$21bn in new inflows since late August, pushing total holdings to 3,857t, just shy of 2020’s record. Western investors continue to dominate, as the US government shutdown, dollar weakness, and equity-market complacency fuel safe-haven demand. 

However, technical indicators now flash warning signals: gold trades 25% above its 200-day moving average, and its RSI above 90 suggests an overheated market. Historical analogues point to average drawdowns of 7–15% after such extremes. The “everything rally” with both risk-on and risk-off assets climbing reflects a market pricing in debasement rather than fear, raising risks of a sharp correction. 

Still, gold’s strategic case remains intact. Long-term drivers structural US fiscal strain, global geopolitical tension, and broadening investor participation continue to support the metal. Short-term volatility looks inevitable, but the trend toward higher secular gold prices appears firmly in place.