Gold crossed a historic threshold on Wednesday, trading above $4,000 an ounce for the first time, as investors rushed toward safe-haven assets amid political and economic instability in the United States, Bloomberg reported.

The rally reflects mounting unease over Washington’s budget standoff and the outlook for US growth. Fears of a potential government shutdown and doubts about fiscal discipline have reignited demand for assets seen as more stable than equities or bonds.

In September alone, bullion-backed exchange-traded funds registered their strongest monthly inflow in more than three years, highlighting a shift in portfolio strategies from risk assets to defensive holdings. Central banks, too, have continued to accumulate gold at a steady pace, providing a base for the metal’s extraordinary climb.

Spot prices rose as much as 0.4% to $4,001.01 an ounce. The milestone marks a dramatic reversal for a commodity that traded below $2,000 just two years ago. Since January, gold has gained over 50%— outperforming most major equity indices and reinforcing its status as a hedge against policy and market uncertainty.

Charu Chanana, strategist at Saxo Capital Markets, told Bloomberg that gold’s rally has entered a new phase. “Breaking $4,000 isn’t just about fear — it’s about reallocation,” she said. “With rate cuts approaching and real yields easing, investors are turning from overstretched tech equities to hard assets.”

The Federal Reserve’s recent pivot toward monetary easing has further lifted sentiment, enhancing the appeal of an asset that yields no interest but thrives when borrowing costs fall. For many investors, gold has become a shield against the next wave of market shocks.