Gold surged to a historic high of over $4,300 per ounce on October 16, 2025, with spot prices reaching $4,312 and U.S. December futures hitting $4,328.70, pushing its total market capitalization to $30 trillion for the first time.
The rally was driven by escalating U.S.-China tensions, expectations of Federal Reserve rate cuts, and geopolitical risks, prompting investors to shift capital from riskier assets to safe havens. Bank of America raised its 2026 gold price target to $5,000, with an average of $4,400, and increased its silver outlook to $65.
In the crypto market, this led to $1.2 billion in net outflows, with Bitcoin (BTC) and Ethereum (ETH) experiencing liquidity pressures as funds concentrated into gold. Central banks from China, India, and Turkey aggressively accumulated gold, exacerbating the capital shift.
Traditional equities suffered simultaneous declines, with the Dow Jones dropping 301.07 points, the S&P 500 falling 0.6%, and the Nasdaq sliding 0.5%. Banking stocks were hit hard, including Zions Bank down 13% and Western Alliance sinking 11%, amid loan losses and bankruptcies in auto-linked companies.
Trade tensions intensified as President Donald Trump threatened 100% tariffs on Chinese imports and a ban on cooking oil imports, causing the Cboe Volatility Index (VIX) to spike to its highest since May. Historical patterns suggest gold rallies may precede corrections, with experts forecasting a potential Bitcoin rally to $150,000 post-peak.
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