Gold hits record high on US rate cut bets; silver follows suit
Gold prices climbed to a record high above $4,100 on Tuesday on increased U.S. Federal Reserve rate cut prospects, while resurgent U.S.-China trade woes boosted safe-haven bets, including those for silver, which also reached an all-time peak.
Spot gold climbed 1.3% to an all-time high of $4,162.31 per ounce, as of 0341 GMT.
U.S. gold futures for December delivery gained 0.9% to $4,171.
Gold has surged 58% year-to-date, breaking the crucial $4,100 threshold for the first time on Monday.
The 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 analysts now forecast gold to hit $5,000 by 2026, while Standard Chartered raised its 2026 average forecast to $4,488.
Spot silver jumped 1.1% to $53.13, touching a record high of $53.45 earlier in the session, 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 bolster the case for further U.S. interest rate cuts.
Investors now look to Fed Chair Jerome Powell's address at the NABE annual meeting on Tuesday for rate cut cues.
Traders are pricing in a 97% and 90% chance of a 25-bp rate cut in October and December respectively. Non-yielding gold tends to do well in low-interest-rate environments.[FEDWATCH/]
Elsewhere, U.S. President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October, U.S. Treasury Secretary Scott Bessent said on Monday.
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 U.S.-made software effective November 1.
The ongoing U.S. federal government shutdown, now in its 13th day, is starting to affect the nation's economy, Bessent added.
Platinum rose 1% to $1,661.70, and palladium gained 2.2% to $1,507.50.
