Gold hovers near record high on renewed trade tensions, US rate outlook
Investors expect a 25-basis-point rate cut at the upcoming Fed meeting this month, with a similar reduction anticipated in December
[BENGALURU] Gold prices rose on Wednesday (Oct 15), hovering near record highs, as investors flocked to safe-haven bullion after renewed U.S.-China trade tensions deepened global uncertainty, with expectations of further US interest rate cuts adding to the momentum.
Spot gold was up 0.4 per cent at US$4,155.99 per ounce, as at 8.32 am. US gold futures for December delivery gained 0.3 per cent to US$4,174.30.
Bullion, which yields no interest and is considered a safe haven during broader uncertainty, has gained 55 per cent year-to-date and touched a record high of US$4,179.48 on Tuesday.
Gold’s rally is driven by multiple factors, including geopolitical and economic uncertainties, expectations of US interest rate cuts, strong central bank buying, de-dollarisation trend and robust ETF inflows.
Federal Reserve chair Jerome Powell said on Tuesday that the US labour market remains subdued, though the economy “may be on a somewhat firmer trajectory than expected”.
Powell added that interest rate decisions would be made on a “meeting-by-meeting” basis, balancing labour market weakness with persistent inflation above target.
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Investors expect a 25-basis-point rate cut at the upcoming Fed meeting this month, with a similar reduction anticipated in December.
US President Donald Trump said that Washington is considering cutting some trade ties with China, including in cooking oil, amid escalating trade tensions. Both countries began imposing tit-for-tat port fees on Tuesday.
The International Monetary Fund raised its 2025 global growth forecast, citing better-than-expected tariff and financial conditions, while cautioning that a renewed US-China trade conflict could significantly curb growth.
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Spot silver was up 0.8 per cent at US$51.83 per ounce, after having hit a record high of US$53.60 on Tuesday, tracking gold’s rally and tightening in the spot market.
Elsewhere, platinum edged 0.1 per cent lower to US$1,635.90 and palladium was steady at US$1,526.45. REUTERS
