Spot gold breaks through $4,000 milestone, asset reallocation drives rally

On October 8th, as the market worried about the US economy and the risk of government shutdown increased, the spot gold price broke through the $4,000 per ounce mark for the first time, adding new impetus to this hot rally. Since the beginning of this year, the price of gold has risen by more than 50% due to factors such as global trade uncertainty, the dispute over the independence of the Federal Reserve and concerns about the stability of the US fiscal. With Washington mired in a government funding impasse, investors have sought refuge to prevent the impact of the addressable market, further increasing the urgency of gold prices. In addition, the start of the Federal Reserve's monetary policy easing cycle is also positive for gold. Investors reacted by piling into gold exchange traded funds, which recorded their biggest monthly inflows in more than three years in September. Charu Chanana, strategist at Saxo Capital Markets, said: "< b > Gold broke through the $4,000 mark not just because of panic, but because of the need for asset reallocation. With economic data on hold, interest rate cuts on the horizon, real yields are falling and artificial intelligence heavy stocks are already overvalued. Central banks laid the groundwork for this rally, and now retail investors and ETF funds are driving the next leg of the rally."