The price of gold is closing in on $4,000 an ounce for the first time as investors fearful of missing out on the rally pile into the precious metal.
Concerns over global debt levels and inflation, a weaker dollar and geopolitical tensions around the world have sent bullion soaring this year – underlining its status as a haven in times of trouble.
Bitcoin has also emerged as a popular alternative for investors and hit a record $125,000 over the weekend.
While institutional investors and central banks have been driving the gold rally, experts say it is now being turbocharged by retail investors jumping on the bandwagon for ‘fear of missing out’ – or FOMO.
‘It’s gold-plated FOMO,’ said Luca Paolini, chief strategist at Pictet Asset Management. ‘Gold has become so big that you cannot ignore. There becomes a level when it becomes impossible not to own it.’
The price of gold has risen 50 per cent this year
Bullion rose to a record $3,949 an ounce on Monday amid mounting concerns over the impact of the US government shutdown – taking gains for the year to 50pc and putting it in sight of $4,000.
Nick Cawley, an analyst for gold dealer Solomon Global, said ‘a perfect storm’ is sending prices higher ‘with both institutional and retail investors seeking safe-haven assets in an increasingly uncertain global economic landscape’.
He added: ‘That scratching sound you can hear in the background is a raft of analysts and market forecasters hurriedly updating their end-of-year price targets for gold and silver. Again.
‘Both precious metals are enjoying their best year in decades, with gold showing year-to-date gains of 50 per cent and silver climbing nearly 70 per cent.
‘Further gains are expected in the fourth quarter and beyond, prompting experts to revise their forecasts upward repeatedly throughout the year.
‘There is now a growing sentiment that the US dollar is starting to lose its pre-eminence as the world’s dominant reserve currency, with a number of other asset classes, including precious metals and bitcoin, seeing heavy buying and record highs.’
Jemma Slingo, Pensions and Investment Specialist, Fidelity International noted a flood of cash into funds such as Ninety One Global Gold and Jupiter Gold & Silver as investors seek to take advantage of rising prices.
‘The rally in precious metals has clearly fed through into investor behaviour,’ she said.
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