Gold hits record high on safe-haven rush; silver follows suit

Gold prices climbed to a record high on Tuesday as renewed U.S.-China trade tensions exacerbated broader uncertainty, bolstering safe-haven demand, while the prospects of U.S. rate cuts lent support, with silver also reaching an all-time peak.

FUNDAMENTALS

* Spot gold was up 0.4% at $4,124.79 per ounce, as of 0029 GMT, after having hit an all-time high of $4,131.52 earlier in session.

* U.S. gold futures for December delivery gained 0.3% to $4,143.10.

* Safe-haven gold has surged 57% year-to-date, surpassing the crucial $4,100 milestone for the first time on Monday, bolstered by geopolitical and economic uncertainties, rate-cut expectations, strong central bank buying, and strong ETF inflows. * Spot silver was up 0.3% at $52.49 per ounce, after hitting $52.70 earlier in the day, supported by factors driving gold and tightening in the spot market.
* U.S. President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October, U.S. Treasury Secretary Scott Bessent said on Monday.
* The latest tensions followed China’s announcement on Thursday to expand rare-earth export controls, prompting Trump to respond with a 100% tariff threat on Chinese imports and export controls on critical U.S.-made software starting November 1.
* The ongoing U.S. federal government shutdown, now in its 13th day, is starting to affect the nation’s economy, Bessent noted.

* Bank of America and Societe Generale analysts now forecast gold to hit $5,000 by 2026, while Standard Chartered raised its 2026 average forecast to $4,488.

* Meanwhile, Philadelphia Federal Reserve chief Anna Paulson said that rising risks to the labor market bolster the case for further U.S. interest rate cuts.

* U.S. Federal Reserve Chair Jerome Powell is set to address the NABE annual meeting on Tuesday, which may provide fresh cues on rate cuts.

* Investors continue to anticipate a 25-basis-point rate cut at Fed meeting this month, followed by similar reduction in December.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.17% to 1,018.88 tonnes on Monday from Friday.

* Elsewhere, platinum climbed 0.5% to $1,653.45 and palladium gained 1.6% to $1,498.25, hitting its highest level since May 2023.

DATA/EVENTS (GMT)

0600 Germany HICP Final YY September

0600 UK Claimant Count Unem change September

0600 UK ILO Unemployment Rate August

0600 UK HMRC Payrolls Change September

0900 Germany ZEW Economic Sentiment October

0900 Germany ZEW Current Conditions October.