NEW YORK: Gold broke through USD4,100 per ounce for the first time on Monday, hitting another record high on renewed US-China trade tensions and expectations of US interest rate cuts, while silver also rose to an all-time high.
Spot gold was up 2.1 percent to USD4,099.55 per ounce, as of 10:50 a.m. ET (1450 GMT), after hitting a record USD4,103.58. US gold futures for December delivery rose 3 percent to USD4,120.10.
Gold has climbed 56 percent this year and scaled the USD4,000 milestone for the first time last week, driven by factors including geopolitical and economic uncertainties, expectations of US interest rate cuts and robust central bank buying.
“Rises in gold and silver prices happen when investors are concerned about the state of the world, either economically or politically,” said CPM Group managing partner Jeffrey Christian. On the geopolitical front, US President Donald Trump reignited trade tensions with China on Friday, ending an uneasy truce between the world’s two largest economies.
Meanwhile, traders are pricing in a 97 percent probability of a 25-basis-point Federal Reserve rate cut in October and a 100 percent chance for December. Gold, a non-yielding asset, tends to do well in low-interest rate environments. Analysts at Bank of America and Societe Generale now expect gold to reach USD5,000 in 2026, while Standard Chartered has raised its forecast to an average of USD4,488 next year.
“This rally has legs in our view, but a near-term correction would be healthier for a longer-term uptrend,” said Suki Cooper, global head, commodities research at Standard Chartered Bank.
Spot silver rose 3.3 percent to USD51.95, touching a record high of USD52.07 earlier in the session, buoyed by the same factors supporting gold and spot market tightness.
Technical indicators show both are overbought, with the relative strength index (RSI) at 80 for gold and 83 for silver.
Platinum rose 4.6 percent to USD1,660.57 and palladium gained 5.4 percent to USD1,482.00.
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