The price of gold has climbed above $4,000 (£2,985) an ounce for the first time, extending a rally fuelled by worries over political drama in Japan, France and the US, where the federal government shutdown has dragged on.
Spot gold rose to $4,029 an ounce, yet another record high, and is up 50% so far this year. This comes after increases of 27% last year and 13% the year before.
The precious metal is seen as a safe haven in times of turmoil, and also used as a hedge against rising inflation.
The hedge fund billionaire Ray Dalio compared the current period to the early 1970s, when soaring inflation and high government debt levels and spending undermined confidence in other assets. Speaking at the Greenwich Economic Forum in Connecticut yesterday, he said: “It’s very much like the early ’70s ... where do you put your money in?
“Gold is a very excellent diversifier in the portfolio. If you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold … because it is one asset that does very well when the typical parts of the portfolio go down.”
Investors’ appetite for all things gold seems undiminished. Investors have been piling into gold exchange-traded funds, with inflows hitting $64bn so far this year, according to the World Gold Council, with a record $17.3bn in September alone. Central banks have also been buying gold.
Expectations of further US interest rate cuts, worries over geopolitical and economic uncertainty, trade tariffs and an AI bubble, along with a weak dollar, have driven the gold rally.
The car dealership group Vertu Motors has warned of a £5.5m hit to its annual profits from “significant disruption” to its Jaguar Land Rover showrooms after the luxury carmaker paused production for five weeks after a crippling cyber-attack.
Vertu’s chief executive, Robert Forrester, said it was “disappointing for the industry to face major disruption across the JLR network” during September, a key month for car sales as number plates are changed.
“While the situation is fluid, it appears to be easing in recent days.”
Vertu reported record half-year sales of £2.51bn for the six months to the end of August, up from £2.47bn a year earlier. Adjusted pre-tax profit fell by 10% to £20m.
It is the last day of the Tory party conference in Birmingham.
Later today, the International Monetary Fund’s managing director, Kristalina Georgieva, is due to give a curtain-raiser speech in the run-up to the IMF’s meeting in Washington next week.
The US Federal Reserve will release the minutes of its last meeting, which will shed further light on its thinking, and the wide rift among officials regarding the policy outlook.
Today’s key events
• Conservative party conference
• 2pm BST: speech by IMF’s managing director, Kristalina Georgieva
• 4pm BST: Huw Pill gives lecture in Birmingham
• 7pm BST: US Federal Reserve minutes of last meeting
We’ll be tracking all the main events throughout the day on our business live blog …