Gold hovers near record high on renewed trade tensions, US rate outlook
FUNDAMENTALS
* Spot gold was up 0.4% at $4,155.99 per ounce, as of 0032 GMT. U.S. gold futures for December delivery gained 0.3% to $4,174.30.
* Bullion, which yields no interest and is considered a safe haven during broader uncertainty, has gained 55% year-to-date and touched a record high of $4,179.48 on Tuesday.
* Gold’s rally is driven by multiple factors, including geopolitical and economic uncertainties, expectations of U.S. interest rate cuts, strong central bank buying, de-dollarisation trend and robust ETF inflows.
* Federal Reserve Chair Jerome Powell said on Tuesday that the U.S. 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 labor market weakness with persistent inflation above target. * Investors expect a 25-basis-point rate cut at the upcoming Fed meeting this month, with a similar reduction anticipated in December.
* U.S. 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 U.S.-China trade conflict could significantly curb growth.
* Trump said his administration planned to produce a list on Friday of “Democrat programs” that will be closed as a result of the federal government shutdown.
* Spot silver was up 0.8% at $51.83 per ounce, after having hit a record high of $53.60 on Tuesday, tracking gold’s rally and tightening in the spot market.
* Elsewhere, platinum edged 0.1% lower to $1,635.90 and palladium was steady at $1,526.45.
DATA/EVENTS (GMT)
0130 China PPI, CPI YY Sep
0645 France CPI (EU Norm) Final MM, YY Sep
0645 France CPI MM, YY NSA Sep.
1200 EU Reserve Assets Total Sep.