Gold prices have surged to a record high, propelled by increasing expectations that the Federal Reserve will continue its monetary easing policies. Heightened tensions between the United States and China are also contributing to the precious metal’s ascent. In New York trading, bullion broke through $US4300 an ounce, continuing a significant rally that began in August. Silver also experienced a surge, climbing above $US53 an ounce.
Market participants are increasingly betting on at least one substantial US rate cut before the end of the year. Federal Reserve chairman Jerome Powell recently indicated that the central bank remains on course to implement another quarter-point rate reduction later in October, further fuelling speculation and bolstering gold’s appeal as a safe-haven asset.
Concerns regarding renewed trade frictions, particularly those between China and the US, are providing additional support for gold. The precious metal has seen an impressive surge of more than 60% this year. This growth is underpinned by central bank purchases, inflows into exchange-traded funds, and a surge in demand for safe-haven assets due to geopolitical and trade uncertainties, increasing fiscal and debt levels, and perceived threats to the Federal Reserve’s independence.
