Gold rate nears $4,200 per ounce as safe-haven rush intensifies

WASHINGTON: Gold prices touched a fresh record high on Wednesday, hovering just below the $4,200-per-ounce mark, as investors sought safety amid renewed US-China trade tensions and growing expectations of more interest rate cuts by the Federal Reserve.

According to market data, spot gold climbed 0.9 percent to $4,178.15 per ounce at 0448 GMT, after briefly reaching an all-time high of $4,186.68 earlier in the day. US gold futures for December delivery rose 0.8 percent to $4,197.50.

Rate cut hopes drive gold higher

Analysts said gold’s latest surge was driven by Federal Reserve Chair Jerome Powell’s dovish comments, which hinted at further monetary easing. Powell noted that while the US economy appeared to be on a “firmer trajectory than expected,” the labour market remained weak. He added that rate decisions would continue to be made on a “meeting-by-meeting” basis, balancing inflation concerns with job growth.

Investors are now betting heavily on a 25-basis-point rate cut in both October and December. Gold tends to thrive in a low interest rate environment, where returns on competing assets such as bonds are less attractive.

“The US government shutdown and Jerome Powell’s soft stance have given gold the perfect excuse to climb even higher,” said Matt Simpson, a senior analyst at StoneX. “It’s also turned into a momentum trade, with traders jumping in just to chase the rally.”

Political and trade tensions lift safe-haven demand

Political uncertainty in the United States added another layer of support. President Donald Trump announced that his administration would release a list of “Democrat programmes” that will be closed due to the ongoing government shutdown, intensifying concerns about fiscal stability.

At the same time, renewed tensions between Washington and Beijing have unsettled investors. Trump said his administration was considering cutting certain trade ties with China, including those related to cooking oil, while both nations began imposing new port fees on Tuesday.

The International Monetary Fund, while slightly raising its 2025 global growth outlook, warned that these trade frictions could undermine economic recovery.

Gold’s record-breaking year

Gold’s rally has been remarkable in 2025, gaining nearly 59 percent since January. Analysts attribute the surge to a mix of geopolitical uncertainties, strong central bank buying, the de-dollarisation trend, and heavy inflows into gold-backed exchange-traded funds.

Silver also followed gold’s upward trajectory, rising 1.4 percent to $52.17 per ounce after touching a record $53.60 on Tuesday. Platinum edged up 0.7 percent to $1,648.80, while palladium added 0.2 percent to $1,528.68.

As investors brace for further volatility, the precious metals market appears to be entering a new era of high demand and record valuations.

Read next: Petrol prices likely to drop for rest of October after Ogra review