Gold broke through $4,100 an ounce for the first time on Monday (October 13), hitting a new record high amid renewed U.S.-China trade tensions and expectations of a U.S. interest rate cut, while silver also rose to an all-time high.
Spot gold rose 2.2% to $4,106.48 an ounce, as of 1:47 p.m. ET (1747 GMT), after hitting a record $4,116.77. U.S. December gold futures closed 3.3% higher at $4,133.
Gold has gained 56% this year and topped $4,000 for the first time last week, driven by factors including geopolitical and economic uncertainty, expectations of a U.S. interest rate cut, and robust central bank buying.
"Gold could easily continue its upward momentum. We could see prices above $5,000 by the end of 2026," said Phillip Streible, chief market strategist at Blue Line Futures. Steady central bank buying, strong ETF inflows, US-China trade tensions, and the prospect of lower US interest rates provide structural support for the market, Streible added.
On the geopolitical front, US President Donald Trump re-ignited trade tensions with China on Friday, ending an uneasy truce between the world's two largest economies.
Meanwhile, traders are pricing in a 97% probability of a 25 basis point Federal Reserve rate cut in October and a 100% probability in December. Gold, a non-yielding asset, tends to perform well in low-interest-rate environments.
Analysts at Bank of America and Societe Generale now expect gold to reach $5,000 by 2026, while Standard Chartered has raised its projections to an average of $4,488 next year. "We think this rally still has potential, but a short-term correction would be healthier for the longer-term uptrend," said Suki Cooper, global head of commodity research at Standard Chartered Bank.
Spot silver rose 3.1% to $51.82, hitting a record high of $52.12 earlier in the session, driven by the same factors that supported tight gold and spot markets. Technical indicators show both are in overbought conditions, with the relative strength index (RSI) at 80 for gold and 83 for silver. Platinum rose 3.9% to $1,648.25, and palladium rose 5.2% to $1,478.94. (alg)
Source: Reuters
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