Gold prices soared to an all-time high on Wednesday, trading around $4,200 per ounce, driven by rising expectations of US interest rate cuts and renewed geopolitical tensions.
Spot gold climbed 1.1% to $4,185.59 per ounce as of 07:04 AM WAT, after touching a record high of $4,193.38 earlier in the session. US gold futures for December delivery also advanced, gaining 1% to $4,204.30.
The rally reflects growing market confidence that the Federal Reserve will implement at least two 25-basis-point rate cuts — one each in October and December — as investors continue to seek safe-haven assets amid uncertainty.
“Gold thrives in low interest rate environments, especially during periods of heightened economic or political instability,” said one commodities analyst.
Gold has surged 59% year-to-date, driven by a confluence of factors including mounting geopolitical risks such as renewed US-China tensions, aggressive central bank buying, a global shift away from the US dollar, robust exchange-traded fund (ETF) inflows, and fears of an overheated equity market.
The latest leg of the rally was fuelled by renewed trade friction between Washington and Beijing, alongside concerns over a potential US government shutdown, adding to investor nervousness.
Last Wednesday, gold broke the $4,000 barrier for the first time, spurred by safe-haven inflows and speculation over the longevity of the tech-fuelled stock market rally, which some analysts warn may signal a growing asset bubble.
Silver tracked gold’s rally, jumping 1.9% to $52.43 per ounce, after setting a record high of $53.60 on Tuesday amid tightening supply in the spot market. Platinum rose 0.8% to $1,644.49, while palladium climbed 0.8% to $1,537.19, benefiting from the overall strength in the precious metals complex.
