On Wednesday, gold prices rose, staying near record highs as investors sought the safety of bullion due to rising U.S.-China trade tensions that increased global uncertainty. Expectations of further U.S. interest rate cuts also played a role in this upward movement. Spot gold rose by 0.4% to $4,155.99 per ounce, as of 0032. Gold futures in the U.S. for December delivery rose by 0.3%, hitting a price of $4,174.30. Bullion, lacking interest yield and seen as a safe haven during broader uncertainty, has risen by 55% this year, hitting a record high of $4,179.48 on Tuesday.

The recent rally in gold can be attributed to a combination of factors, including geopolitical and economic uncertainties, expectations of interest rate cuts in the United States, major purchases by central banks, the ongoing trend of de-dollarisation, and significant inflows into exchange-traded funds. On Tuesday, Federal Reserve Chair Jerome Powell remarked that the U.S. labor market is still subdued, even though the economy “might be on a somewhat firmer trajectory than anticipated.” Powell stated that interest rate decisions will be made on a “meeting-by-meeting” basis, considering the vulnerability of the labor market in relation to the persistent inflation that exceeds the target level.

Investors are looking forward to a 25-basis-point rate cut at the upcoming Fed meeting this month, with a similar decrease anticipated in December. U.S. President Donald Trump suggested that Washington is considering scaling back some trade ties with China, especially regarding cooking oil, amid escalating trade tensions. On Tuesday, both countries implemented mutual port fees. The International Monetary Fund has updated its 2025 global growth forecast, citing improved tariff and financial conditions compared to earlier expectations. Nonetheless, it cautioned that a revival of tensions in U.S.-China trade relations could significantly impede growth prospects.

Trump stated that his administration plans to unveil a list on Friday outlining “Democrat programs” that will be cut because of the federal government shutdown. Spot silver increased by 0.8% to $51.83 per ounce, following a record high of $53.60 on Tuesday, influenced by the rally in gold and a tightening in the market. Elsewhere, platinum dipped by 0.1% to $1,635.90, while palladium held steady at $1,526.45.