Quick overview

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Gold reached a record high as demand surged due to increased tensions between the US and China, along with speculation that the Federal Reserve would continue to ease monetary policy through the end of the year.

Bullion’s rapid rally, which began in mid-August, has led to a rise of more than 5% this week, peaking above $4,242 per ounce on Thursday.

Spot gold was up 0.6%, reaching $4,232.98 per ounce, while silver prices remained unchanged. The Dollar Spot Index dipped 0.1% for the third consecutive day. Although palladium prices increased, platinum remained flat.

Fed Chair Jerome Powell indicated this week that the central bank is on track to deliver another quarter-point reduction later this month, fueling traders’ expectations for at least one significant US rate cut by year-end. Precious metals typically benefit from lower borrowing costs since they do not pay interest.

Treasury Secretary Scott Bessent suggested that a longer pause should be considered before increasing tariffs.. However, President Donald Trump announced that the United States is now engaged in a trade war with China, raising concerns about potential long-term damage to the global economy.

This situation could increase gold’s appeal as a safe-haven asset. Additionally, the ongoing U.S. government shutdown and the so-called “debasement trade”—in which investors move away from sovereign debt and currencies to protect themselves from unsustainable budget deficits—have also contributed to rising gold prices.

Another key factor contributing to the over 60% increase in gold prices this year has been significant purchasing by central banks. Analysts Soni Kumari and Daniel Hynes noted that anticipated rate cuts are fueling gold’s “extraordinary rally,” which is still ongoing. They have raised their price predictions for gold to $4,400 per ounce by the end of the year, with a potential peak of around $4,600 expected by June 2026.