Gold prices hit another record high on Tuesday (December 7th), driven by strong investment demand amid widespread geopolitical and economic uncertainty, with additional support from expectations of further US interest rate cuts.

Spot gold held at $3,959.82 per ounce at 11:11 GMT, after hitting an all-time high of $3,977.19 earlier in the session. US gold futures for December delivery rose 0.2% to $3,983.10.

"Strong ETF demand remains key, driven by 'FOMO' and eroding confidence in traditional safe-haven assets," said Ole Hansen, head of commodity strategy at Saxo Bank, adding that continued central bank demand and lower funding costs are also supporting bullion.

The White House on Monday eased President Donald Trump's assertion that government layoffs were underway due to the ongoing government shutdown, but warned that layoffs could occur as the impasse entered its seventh day.

The economic shutdown has delayed the release of key economic indicators, forcing investors to rely on secondary, non-governmental data to gauge the timing and extent of the Fed's interest rate cuts. Markets continue to expect a 25 basis point rate cut at this month's meeting and a similar cut at the December meeting.

Non-yielding gold thrives in low-interest rates and times of economic uncertainty. Gold has gained 51% so far this year due to massive buying by central banks, increased demand for gold-backed exchange-traded funds (ETFs), a weakening dollar, and growing interest from retail investors seeking to hedge against rising trade and geopolitical tensions.

"I see gold reaching $4,300/oz over the next six months. The USD is expected to continue to depreciate," said Michael Langford, chief investment officer at Scorpion Minerals, with the overall macro and geopolitical scenario positive for gold price appreciation.

Goldman Sachs on Monday raised its gold price forecast for December 2026 to $4,900 per oz from $4,300.

China's central bank added gold to its foreign exchange reserves in September for the 11th consecutive month, according to data from the People's Bank of China. Meanwhile, political turmoil in Japan and France gripped currency and bond markets for a second straight day on Tuesday.

Elsewhere, spot silver fell 0.2% to $48.43 per ounce, platinum fell 1% to $1,611.56, and palladium held steady at $1,320.06. (alg)

Source: Reuters