Gold soared to a new record high on Thursday, driven by mounting expectations that the Federal Reserve will continue cutting interest rates and rising geopolitical tensions between the United States and China.
Spot gold climbed as much as $4,280 per ounce, extending an explosive rally that began in August. The metal is up more than 6% this week alone, as investors pile into bullion amid signs of a dovish shift from the Fed and renewed global uncertainty. The rally has also spilled over into other precious metals, with silver surging over 3% this week as market tightness in London continues to fuel aggressive buying.
Markets are now pricing in at least one large Fed rate cut before year-end, following comments from Chair Jerome Powell, who reaffirmed the central bank’s intention to deliver another quarter-point reduction later this month. Traders are betting that a prolonged easing cycle could push real interest rates deeper into negative territory, a scenario historically bullish for gold, which yields no interest but holds intrinsic value.
The ongoing U.S. government shutdown has delayed the release of key economic data, but analysts expect that once operations resume, the influx of new information may highlight further signs of weakness in the U.S. economy—potentially justifying even more aggressive monetary easing.
At the same time, renewed U.S.-China trade friction has reignited investor anxiety. Reports that President Donald Trump will speak with Russian President Vladimir Putin have also stirred geopolitical speculation, adding another layer of safe-haven demand for gold.
Gold’s rally has been nothing short of historic—up more than 60% this year, supported by massive central bank purchases, surging ETF inflows, and a wave of investors seeking protection from rising global debt, fiscal imbalances, and threats to central bank independence.
“Nothing has changed for me,” said Michael Widmer, Head of Metals Research at Bank of America, in an interview with Bloomberg Television. “For the last $2,000 per ounce, we’ve been bullish, and everything that brought us here remains bullish.” Widmer cautioned, however, that ETF inflows—up 880% year-on-year—may not be sustainable over the longer term.
Meanwhile, the silver market remains under pressure from acute supply constraints. A lack of liquidity in London has sparked a global scramble for physical silver, pushing benchmark spot prices above $53 per ounce, their highest level on record. In the past week alone, more than 15 million ounces have been withdrawn from Comex warehouses in New York, much of it believed to be en route to London to alleviate shortages. Yet, robust ETF inflows of nearly 11 million ounces over the same period have further tightened supply.
As of 12:36 p.m. in New York, spot gold traded 1.5% higher at $4,272.36 per ounce, while silver, platinum, and palladium also advanced. The Bloomberg Dollar Spot Index slipped 0.2%, marking its third consecutive day of losses, further amplifying bullion’s momentum.
With monetary policy easing, geopolitical uncertainty, and physical shortages in key precious metals markets, gold’s record-breaking run shows little sign of slowing—solidifying its status as the world’s premier safe-haven asset.
