Gold extends record rally above $4,300, eyes best weekly gain since 2008

Gold extended its record-breaking rally on Friday, climbing above $4,300, poised for their best weekly performance in 17 years, as escalating U.S.-China trade tensions fuelled market uncertainty, with U.S. rate cut hopes adding to the momentum.

FUNDAMENTALS

* Spot gold rose 0.9% to $4,364.79 per ounce, as of 0040 GMT, after reaching a record high of $4,378.69. Bullion was up 8.7% for the week so far, marking its best weekly performance since September 2008.
* U.S. gold futures for December delivery gained 1.6% to $4,373.20.

* Spot silver climbed 0.5% to $53.97 per ounce, after reaching a record high of $54.35 earlier, tracking gold’s rally and a short squeeze in the spot market, and remained on track for weekly gains.

* The U.S. dollar index fell to over one week low, making greenback-priced bullion less expensive.

* Non-yielding bullion has gained over 65% year-to-date, driven by geopolitical tensions, aggressive rate-cut bets, central bank buying, de-dollarisation and robust ETF inflows. * Market sentiment was further influenced by U.S.-China trade tensions as China accused the U.S. of causing panic over its rare earth controls, while rejecting calls to reverse export curbs. * Federal Reserve Governor Christopher Waller on Thursday voiced support for another rate cut due to labor market concerns, with investors expecting a 25-basis-point reduction at the Fed’s Oct. 29-30 meeting and another in December.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.18% to 1,034.62 tonnes on Thursday from Wednesday, hitting highest level since June 2022.

* U.S. President Donald Trump and Russian President Vladimir Putin agreed on Thursday to another summit on the war in Ukraine.

* Western nations continued to pressure Russia over its oil sales, with Britain imposing sanctions on major Russian oil firms. *

* The U.S. budget deficit shrank by $41 billion to $1.775 trillion in the 2025 fiscal year, the Treasury Department said on Thursday.

* Elsewhere, platinum gained 0.4% to $1,719.55 and palladium was up 0.6% at $1,622.67. Both these metals were headed for weekly gain.

DATA/EVENTS (GMT)

0900 EU HICP Final MM, YY Sep

1230 US Housing Starts Number Sep

1230 US Import Prices YY Sep.