Why gold is surging again: US shutdown, France crisis boost demand - What it means for investors in 2025
Gold hit a new record of $3,965.63 per ounce on Tuesday, according to data from goldprice.org, as investors flocked to safety amid fears of political and economic instability. The latest rally mirrors past bull runs seen during the 2008 global financial crisis and the 2020 pandemic, when gold thrived as risk appetite collapsed.
- Oct 7, 2025,
- Updated Oct 7, 2025 1:29 PM IST
Gold prices are on a dazzling run again in 2025, climbing to fresh record highs amid deepening global uncertainty. With the US government shutdown and political unrest in France rattling investors, the yellow metal has surged close to the $4,000 per ounce mark, reaffirming its status as the ultimate safe-haven asset.
Gold hit a new record of $3,965.63 per ounce on Tuesday, according to data from goldprice.org, as investors flocked to safety amid fears of political and economic instability. The latest rally mirrors past bull runs seen during the 2008 global financial crisis and the 2020 pandemic, when gold thrived as risk appetite collapsed.
Shutdown shocks US markets
The ongoing US government shutdown, triggered by Congress’s failure to pass crucial funding bills before the September 30 deadline, has shaken market confidence. Nearly 40% of the federal workforce — around 750,000 employees — are now on unpaid leave, with key services suspended.
According to Bloomberg, the suspension of federal operations has deprived investors and policymakers of essential economic data, making it harder for the US Federal Reserve to gauge real-time conditions. Traders now expect a quarter-point rate cut this month — a move that typically supports gold, which offers no yield but benefits from lower interest rates.
Meanwhile, political turmoil in France has added another layer of anxiety, pushing investors to seek shelter in gold.
“Gold has returned to the spotlight as global economic and geopolitical tensions intensify,” said Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA). “The price of 24-carat gold has crossed ₹1,19,000 per 10 grams in India. Alongside festive-season buying during Dussehra, the safe-haven demand and rupee weakness are fueling further upside.”
Kamboj added that the ongoing uncertainty could push prices higher in the weeks ahead, as central banks prepare to ease monetary policy globally.
Gold ETFs, Digital Gold
Rahul Kalantri, VP Commodities at Mehta Equities Ltd., noted that gold and silver have kicked off the week with “sharp gains and fresh all-time highs.” He said ETF investment demand remains robust, with gold holdings rising 17% and silver 16% so far this year.
Even as jewellery demand cools due to record prices, investment interest through Gold ETFs, Sovereign Gold Bonds, and digital gold platforms continues to accelerate.
In India, a weaker rupee is further amplifying gold’s returns. Since gold is dollar-denominated, any depreciation in the rupee increases its local price. Historically, gold has delivered around 11% annualized returns in rupee terms, outpacing many traditional assets.
Should you buy Gold now?
Experts believe gold’s long-term outlook remains strong, but short-term corrections are possible. Investors are advised to buy on dips rather than chase current highs.
“Gold prices have hit new record levels on Comex amid the extended US shutdown and political turmoil in France,” said Darshan Desai, CEO of Aspect Bullion & Refinery. “If gold pulls back slightly, it could be a good entry point for investors waiting to diversify their portfolios.”
According to Tata Mutual Fund’s Gold and Silver Outlook Report (October 2025), gold may consolidate between $3,500–4,000 per ounce in the near term, supported by trade and geopolitical risks. The report suggests a balanced allocation between gold and silver (50:50), as both metals appear attractive in the current environment.
Gold’s 2025 rally is more than a festive-season phenomenon. It reflects deep shifts in global monetary policy, rising geopolitical risk, and weakening currencies. For Indian investors, gold remains not just a glittering ornament but a strategic shield — a timeless hedge against inflation, uncertainty, and the unpredictable turns of the global economy.
Gold prices are on a dazzling run again in 2025, climbing to fresh record highs amid deepening global uncertainty. With the US government shutdown and political unrest in France rattling investors, the yellow metal has surged close to the $4,000 per ounce mark, reaffirming its status as the ultimate safe-haven asset.
Gold hit a new record of $3,965.63 per ounce on Tuesday, according to data from goldprice.org, as investors flocked to safety amid fears of political and economic instability. The latest rally mirrors past bull runs seen during the 2008 global financial crisis and the 2020 pandemic, when gold thrived as risk appetite collapsed.
Shutdown shocks US markets
The ongoing US government shutdown, triggered by Congress’s failure to pass crucial funding bills before the September 30 deadline, has shaken market confidence. Nearly 40% of the federal workforce — around 750,000 employees — are now on unpaid leave, with key services suspended.
According to Bloomberg, the suspension of federal operations has deprived investors and policymakers of essential economic data, making it harder for the US Federal Reserve to gauge real-time conditions. Traders now expect a quarter-point rate cut this month — a move that typically supports gold, which offers no yield but benefits from lower interest rates.
Meanwhile, political turmoil in France has added another layer of anxiety, pushing investors to seek shelter in gold.
“Gold has returned to the spotlight as global economic and geopolitical tensions intensify,” said Aksha Kamboj, Vice President of the India Bullion & Jewellers Association (IBJA). “The price of 24-carat gold has crossed ₹1,19,000 per 10 grams in India. Alongside festive-season buying during Dussehra, the safe-haven demand and rupee weakness are fueling further upside.”
Kamboj added that the ongoing uncertainty could push prices higher in the weeks ahead, as central banks prepare to ease monetary policy globally.
Gold ETFs, Digital Gold
Rahul Kalantri, VP Commodities at Mehta Equities Ltd., noted that gold and silver have kicked off the week with “sharp gains and fresh all-time highs.” He said ETF investment demand remains robust, with gold holdings rising 17% and silver 16% so far this year.
Even as jewellery demand cools due to record prices, investment interest through Gold ETFs, Sovereign Gold Bonds, and digital gold platforms continues to accelerate.
In India, a weaker rupee is further amplifying gold’s returns. Since gold is dollar-denominated, any depreciation in the rupee increases its local price. Historically, gold has delivered around 11% annualized returns in rupee terms, outpacing many traditional assets.
Should you buy Gold now?
Experts believe gold’s long-term outlook remains strong, but short-term corrections are possible. Investors are advised to buy on dips rather than chase current highs.
“Gold prices have hit new record levels on Comex amid the extended US shutdown and political turmoil in France,” said Darshan Desai, CEO of Aspect Bullion & Refinery. “If gold pulls back slightly, it could be a good entry point for investors waiting to diversify their portfolios.”
According to Tata Mutual Fund’s Gold and Silver Outlook Report (October 2025), gold may consolidate between $3,500–4,000 per ounce in the near term, supported by trade and geopolitical risks. The report suggests a balanced allocation between gold and silver (50:50), as both metals appear attractive in the current environment.
Gold’s 2025 rally is more than a festive-season phenomenon. It reflects deep shifts in global monetary policy, rising geopolitical risk, and weakening currencies. For Indian investors, gold remains not just a glittering ornament but a strategic shield — a timeless hedge against inflation, uncertainty, and the unpredictable turns of the global economy.