Gold leaps above USD4,100 on hopes

LONDON: Gold prices jumped to a record high above USD4,100 on Tuesday, supported by rising expectations of a US Federal Reserve rate cut this month and safe-haven demand following renewed trade tensions between the world’s two largest economies.

Spot gold rose 0.5 percent to USD4,129.16 per ounce by 1138 GMT, after hitting a record high of USD4,179.48 earlier in the session. US gold futures for December delivery rose 0.4percent to USD4,147.10.

Gold has surged 57percent so far this year and breached the key USD4,100-mark for the first time on Monday, driven by geopolitical and economic uncertainties, rate-cut expectations, strong central bank buying and robust exchange-traded fund inflows.

“Renewed concerns over a global trade war have pushed gold above the psychological USD4,100 level,” said Han Tan, chief market analyst at Nemo.money.

“The next leg up towards mid-USD4,000 territory may require dovish surprises out of this month’s FOMC meeting.” US President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October, US Treasury Secretary Scott Bessent said on Monday.

While trade negotiations between the US and China intensify, the two nations will start charging port fees on ocean shipping firms that move everything from holiday toys to crude oil. Analysts at the Bank of America and Societe Generale expect gold to reach USD5,000/oz in 2026.

Spot silver fell 1.6 percent to USD51.49 per ounce, after hitting a record high of USD53.60 on the same factors supporting gold and spot market tightness. “The short squeeze in London has been the obvious catalyst for silver’s new record high, even as bulls were already benefiting from the broader safe haven play,” Tan said.

Investors now await Federal Reserve Chair Jerome Powell’s speech at the NABE annual meeting on Tuesday for further insight into the central bank’s monetary policy path.

Philadelphia Federal Reserve chief Anna Paulson said rising risks to the labor market have bolstered the case for further US rate cuts. Non-yielding gold tends to do well in low-interest-rate environments. Platinum rose 0.2 percent to USD1,648.32 and palladium rose 1.5 percent to USD1,496.24.