Gold prices climbed to a record high above $4,100 today on increased US Federal Reserve rate cut prospects, while resurgent US-China trade woes boosted safe-haven bets, including those for silver, which also reached an all-time peak.
Spot gold rose 1.7% to a record high of $4,179.48 per ounce, early this morning. US gold futures for December delivery gained 1.3% to $4,187.50.
Gold has surged 57% year-to-date, breaking the crucial $4,100 threshold for the first time yesterday.
Bullion has been bolstered by geopolitical and economic uncertainties, rate-cut expectations, strong central bank buying, and robust exchange-traded fund inflows.
Bank of America and Societe Generale now expect gold to hit $5,000 by 2026, while Standard Chartered raised its price forecast for next year to $4,488.
Spot silver jumped 2.2% to $53.60, buoyed by the same factors supporting gold and spot market tightness.
“The trade tensions are not the primary driver for the rally (today) as increasing bets for the Fed to continue its interest rate cut trajectory, reducing long-term funding costs eventually lowering the opportunity cost are (also supporting gold),” OANDA senior market analyst Kelvin Wong said.
Philadelphia Federal Reserve chief Anna Paulson said that rising risks to the labour market have bolstered the case for further US rate cuts.
Investors now await Fed Chair Jerome Powell’s speech at the NABE annual meeting today for further insight into the Fed’s monetary policy path.
Traders expect a 99% and 94% chance of a 25 basis point cut in October and December, respectively. Non-yielding gold tends to do well in low-interest-rate environments.
Elsewhere, US President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October, US Treasury Secretary Scott Bessent said yesterday.
The latest tensions followed China’s announcement on Thursday to expand rare-earth export controls, prompting Trump to respond with a 100% tariff threat on Chinese goods and export controls on critical US-made software, effective November 1.
The ongoing US federal government shutdown, now in its 13th day, is starting to affect the nation’s economy, Bessent added.
Meanwhile, platinum prices rose 1.9% to $1,677.0, and palladium gained 2.1% to $1,505.75.
Article Source – Gold hits record high on US rate cut bets, silver follows suit
