Gold prices soared to a record high on Monday, driven by increased demand for safe-haven assets due to escalating U.S.-China trade tensions. Moreover, broad economic and political uncertainties, along with expectations of additional cuts in U.S. interest rates, offered further support. Spot gold saw a rise of 0.6%, hitting $4,043.14 per ounce at 0059, after reaching a high of $4,059.30 earlier in the day. Gold futures in the U.S. for December delivery rose by 1.5%, hitting a price of $4,059.60.
Non-yielding bullion has seen an impressive 54% increase year-to-date, driven by a mix of geopolitical risks, central bank purchases, inflows into exchange-traded funds, expectations of U.S. rate cuts, and economic concerns regarding tariffs. On Friday, Trump announced additional tariffs of 100% on Chinese exports and introduced new export controls on crucial software, which will come into effect on November 1. On Sunday, China described Trump’s latest tariffs on Chinese goods as hypocritical and defended its restrictions on exports of rare earth elements and equipment, while choosing not to impose new levies on U.S. products. Trump softened his stance over the weekend, indicating that the U.S. does not intend to “hurt” China.
Trump linked his choice to cut thousands of federal jobs to the actions of Democrats during the ongoing government shutdown, which began on October 1 and has delayed important economic data releases. Markets are expecting a likely 25-basis-point rate cut this month, with another similar reduction anticipated for December. Federal Reserve Chair Jerome Powell is set to address the NABE annual meeting on Tuesday, likely providing fresh perspectives on monetary easing. More Federal Reserve officials are scheduled to make statements throughout the week.
On the geopolitical front, several world leaders are gathering in Egypt on Monday to discuss ceasefire plans for Gaza. Elsewhere, spot silver increased by 0.1% to $50.31 per ounce, while platinum experienced a rise of 2.6% to $1,628.5, and palladium saw a gain of 2.1% to $1,434.75. Silver prices are expected to rise in the medium term, fueled by private investment flows. The firm warned of heightened short-term fluctuations and possible negative risks concerning gold.