Gold Hits New Record Level Amid Rising Trade Tensions Between Washington and Beijing
Gold prices recorded a record high today, Tuesday, driven by renewed trade tensions between the United States and China, which heightened uncertainty in global markets and pushed investors towards safe havens. Expectations of a reduction in U.S. interest rates also contributed to this rise.
Gold rose in spot transactions by 1.3% to reach $4166.07 per ounce, while December futures contracts for gold increased by 0.9% to $4172.60.
The yellow metal had surpassed the $4100 mark for the first time yesterday, Monday, achieving a jump of 57% since the beginning of the year, supported by geopolitical and economic concerns, expectations of interest rate cuts, increased purchases by central banks, in addition to inflows into exchange-traded funds.
Silver also saw an increase of 0.3% to record $52.49 per ounce, after touching $52.70 earlier today.
In the context of trade tensions, U.S. Treasury Secretary Scott Pison stated yesterday, Monday, that "President Donald Trump still intends to meet his Chinese counterpart Xi Jinping in South Korea in late October."
This escalation follows China's announcement on Thursday of expanding restrictions on the export of rare earth materials, prompting Trump to threaten to impose a 100% tariff on Chinese imports, along with imposing controls on the export of sensitive U.S. software starting November 1.
Pison also noted that "the ongoing federal government shutdown, which has entered its thirteenth day, is beginning to cast a shadow over the U.S. economy."
Amid these developments, analysts at Bank of America and Societe Generale expect the price of gold to reach five thousand dollars by 2026, while Standard Chartered Bank raised its average forecast for the same year to $4488.
Investors are still anticipating a 25 basis point rate cut during the upcoming Federal Reserve meeting this month, with similar cuts expected in December.
As for other precious metals, platinum rose by 0.5% to reach $1653.45 per ounce, while palladium increased by 1.6% to record $1498.25, the highest level since May 2023.
