World

Gold Prices Soar Above $4,000: How Asian Markets React Amid Economic Uncertainty

Gold hit $4k/oz; India saw strong demand, China subdued post-holiday. Global uncertainties fueled the surge.

October 10, 2025, 7:56 AM

Extreme close-up of a brilliant, reflective gold bullion bar engraved with "FINE GOLD" and "999.9" purity marks

This extreme close-up shot captures the highly reflective surface and engraved markings, including the "999.9" purity, of a bar of fine gold bullion. By BLACKDAY / Shutterstock.com.

Executive Summary

Spot gold prices surged past $4,000 per ounce for the first time, propelled by global geopolitical and economic uncertainties and expectations of U.S. interest rate cuts.

Physical gold demand varied significantly across Asia, with robust buying in India driven by upcoming festivals contrasting with subdued post-holiday demand in China where dealers offered discounts.

The record gold prices underscore a complex global market, highlighting diverse regional reactions to the metal’s safe-haven appeal and varying price sensitivities among consumers.

The Story So Far

The unprecedented surge in gold prices is largely attributed to a confluence of persistent global geopolitical and economic uncertainties, which enhance gold’s traditional appeal as a safe-haven asset. This trend is further fueled by market expectations of potential interest rate cuts by the U.S. Federal Reserve, making non-yielding bullion more attractive to investors.

Why This Matters

The unprecedented surge in gold prices to a record high, driven by global geopolitical and economic uncertainties and expectations of U.S. interest rate cuts, underscores the metal’s heightened appeal as a safe-haven asset. This rally is, however, creating varied regional market dynamics, with robust festival-driven demand in India leading to premiums, while price-sensitive consumers in China are holding off purchases, resulting in discounts, and Hong Kong residents are selling to capitalize on the high prices.

Who Thinks What?

Indian investors and jewellers are actively purchasing gold despite elevated prices, driven by upcoming festivals and expectations of further price increases.

Chinese consumers are exhibiting lacklustre demand, with dealers offering discounts as buyers reportedly wait for prices to decline, and jewellery demand remaining low.

Residents in Hong Kong are rushing to sell their gold holdings to capitalize on the record price rally.

Spot gold prices surged past the $4,000 per ounce mark for the first time on Wednesday, propelled by global geopolitical and economic uncertainties alongside expectations of U.S. interest rate cuts. This record-breaking rally led to varied responses in key Asian markets, with robust demand in India ahead of major festivals contrasting with subdued buying in China following its Golden Week holiday.

Market Dynamics Across Asia

In India, physical gold demand remained strong this week, as investors and jewellers actively purchased bullion despite the elevated prices. The upcoming Dhanteras and Diwali festivals, considered auspicious times for gold buying, are anticipated to further boost sales.

Indian dealers reported premiums of up to $15 per ounce over official domestic prices, which include import and sales levies. A Mumbai-based bullion dealer noted significant investment demand, with buyers willing to pay extra given expectations of further price increases.

Conversely, China, the world’s top consumer, experienced lacklustre demand after its October 1-8 Golden Week holiday. Dealers offered discounts ranging from $48 to $60 an ounce to attract buyers, who were reportedly waiting for prices to decline.

Peter Fung, head of dealing at Wing Fung Precious Metals, observed that while investment in gold bars and coins as safe havens continued, jewellery demand remained low. Meanwhile, residents in Hong Kong reportedly rushed to sell their gold holdings to capitalize on the record price rally.

Global Economic Context

The unprecedented surge in gold prices is largely attributed to a confluence of factors, including persistent geopolitical tensions and broader economic uncertainties. Expectations of potential interest rate cuts by the U.S. Federal Reserve have also contributed to bullion’s appeal as a safe-haven asset.

Other Asian markets showed mixed trends; gold in Singapore traded between a discount of $0.5 and a premium of $1.30, while in Japan, bullion was sold at par to a premium of $1 per ounce over spot prices.

Outlook

The record gold prices underscore a complex global market, with diverse regional reactions to the metal’s safe-haven appeal. While Indian festive demand provided a strong floor, China’s post-holiday lull highlights price sensitivity, all against a backdrop of ongoing global economic and geopolitical shifts.