Gold prices surged to another record high during Asian trading on Wednesday, extending their winning streak to a third straight session. The rally was fueled by growing expectations of upcoming U.S. interest rate cuts and escalating trade tensions between Washington and Beijing, which drove investors toward safe-haven assets.
Spot gold climbed 1.1% to $4,186.84 per ounce at 02:05 ET (06:05 GMT), after reaching a record peak of $4,193.6 earlier in the session. U.S. December Gold Futures gained 1% to $4,203.27. The precious metal has posted strong gains for eight consecutive weeks and is on track for another solid weekly performance if the momentum holds.
Dovish Fed signals and trade frictions boost demand
The rally accelerated after Federal Reserve Chair Jerome Powell made remarks on Tuesday that were widely seen as dovish. Powell said the U.S. economy may be on a firmer trajectory than some expected, but cautioned that a notably softer labor market is emerging. He added that there was “no risk-free path” for policy and emphasized that future decisions would be made “meeting by meeting.”
His comments reinforced expectations of Fed rate cuts in both October and December, pushing Treasury yields lower and weakening the U.S. dollar — a combination typically supportive for gold.
Trade tensions also added fuel to the rally. President Donald Trump suggested ending certain trade ties with China, specifically targeting cooking oil imports, in response to Beijing’s reduction in U.S. soybean purchases. The tariff dispute intensified further after both countries imposed reciprocal port fees on shipping companies this week.
“Gold and silver are two of the best-performing commodities this year, with prices up by more than 55% and 80% YTD, respectively, supported by the Fed’s policy easing, the central bank’s purchases and geopolitical tensions, which have fuelled demand for safe-haven assets,” ING analysts said in a recent note.
Broader metals market climbs; China inflation data in spotlight
Other precious and base metals also moved higher Wednesday, benefiting from a weaker dollar. Silver gained 1.4% to $52.12 per ounce after hitting a record $53.6 in the previous session. Platinum Futures rose 1.4% to $1,687.20 per ounce.
Benchmark Copper Futures on the London Metal Exchange added 0.7% to $10,667.50 a ton, while U.S. Copper Futures increased 0.8% to $5.04 a pound.
Fresh data from China showed consumer prices fell 0.3% year-on-year in September, easing slightly from a 0.4% decline in August. Producer prices dropped 2.3% from a year earlier, compared with a 2.9% fall the previous month.
The figures highlight ongoing deflationary pressures in the world’s second-largest economy and are likely to raise expectations for additional government stimulus in the months ahead.
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