Gold prices rose to a fresh record to just shy of the $4,200-per-ounce levels on Wednesday, after Jerome Powell hinted at more US Fed rate cuts and amid US-China trade war.
Spot gold was up 0.9% at $4,178.15 per ounce, as of 0448 GMT, after hitting a record high of 4,186.68 earlier in the session. US gold futures for December delivery gained 0.8% to $4,197.50.
Silver price rose 1.4% to $52.17, after having hit a record high of $53.60 on Tuesday, tracking gold’s rally and on tightening supply in the spot market.
Platinum climbed 0.7% to $1,648.80. Palladium rose 0.2% to $1,528.68.
US Fed Rate Cuts
Despite the US government shutdown cutting off official economic data, “the outlook for employment and inflation does not appear to have changed much since our September meeting,” when the US Fed reduced its key rate for the first time this year, US Federal Reserve Chair Jerome Powell said at an event on Tuesday, signalling more rate cuts.
The US Fed is slightly more worried about the job market than its other congressional mandate, which is to keep US inflation in check, he said.
Investors are pricing in a near-certain chance of two US Fed rate cuts in both October and December, and at another in 2026.
Gold Price Trajectory
Gold tends to do well in a low interest-rate environment and during times of political and economic uncertainties.
The safe-haven gold has gained 59% year-to-date, driven by multiple factors, including geopolitical and economic uncertainties, expectations of US Fed rate cuts, strong central bank buying, de-dollarisation and robust ETF inflows.
“The US government shutdown and dovish comments from Jerome Powell have provided the latest reasons for gold prices to accelerate higher,” StoneX senior analyst Matt Simpson told Reuters. “This (gold-price) rally has also become a momentum trade, where traders pile in simply to chase prices getting away from them.”
US-China Tariff & Trade
On Tuesday, US President Donald Trump said Washington was considering cutting some trade ties with China, including in cooking oil. Both countries began imposing tit-for-tat port fees on Tuesday.
The International Monetary Fund (IMF) raised its 2025 global growth forecast, citing better-than-expected tariff and financial conditions, while cautioning that renewed U.S.-China trade tensions could curb growth.