Gold prices rose more than 2% on Monday (October 20th), boosted by expectations of further US interest rate cuts and continued demand for safe-haven assets, as investors awaited US-China trade talks and US inflation data this week.

Spot gold rose 2.3% to $4,346.39 an ounce, as of 1:47 PM ET (17:46 GMT). US gold futures for December delivery closed 3.5% higher at $4,359.40 an ounce.

Gold hit a record high of $4,378.69 on Friday, but closed 1.8% lower—its sharpest decline since mid-May—after comments from US President Donald Trump eased some concerns about US-China trade tensions.

Political and economic concerns are driving prices higher after Friday's sharp sell-off, said Jeffrey Christian, Managing Partner of CPM Group.

"Our expectation is that prices will rise further over the next few weeks and months, and we wouldn't be surprised if they reach $4,500/oz in the near term," he added.

The US government shutdown continued into its 20th day on Monday, after senators failed for the tenth time last week to break the deadlock. The shutdown has also delayed the release of key economic data, leaving investors and policymakers without data ahead of next week's Federal Reserve policy meeting.

The US consumer price index data, delayed by the shutdown, is scheduled for release on Friday. Meanwhile, traders are pricing in a 99% chance that the Federal Reserve will cut interest rates next week, with the next cut in December. Gold, a non-yielding asset, tends to perform well in low interest rates.

Investors are also awaiting the latest developments in US-China trade talks, after Trump said on Friday that his planned meeting with Chinese President Xi Jinping will still go ahead.

"I wouldn't be surprised to see gold prices reach $5,000/oz next year. It will depend on the ongoing political issues and the worsening of the political issues, which is exactly what we're facing right now," Christian said.

Spot silver rose 0.6% to $52.17 per ounce. The precious metal fell 4.4% on Friday, after hitting a record high of $54.47 the same day. Elsewhere, platinum rose 1.9% to $1,640.90 per ounce, and palladium gained 1.5% to $1,496.59 per ounce. (alg)

Source: Reuters