Gold hits record high above $4,100/oz on Fed rate cut bets, trade jitters

Gold notched a fresh record high above the $4,100 level on Tuesday, lifted by expectations of a rate cut this month by the U.S. Federal Reserve and a flight to safety after a flare-up in trade tensions between Washington and Beijing.

Spot gold rose 0.7% to $4,137.76 per ounce as of 11:22 a.m. ET (1522 GMT), after hitting a record high of $4,179.48 earlier in the session.

U.S. gold futures for December delivery gained 0.5% to $4,153.80.

The metal has surged 57% this year, breaking the $4,100 barrier for the first time on Monday.

Its rally has been driven by multiple factors, including geopolitical uncertainties, expectations of U.S. interest rate cuts, strong central bank buying and robust ETF inflows.

Analysts at Bank of America and Societe Generale now see gold reaching $5,000/oz in 2026.

"The uptick in U.S.-China trade tensions, the ongoing government shutdown, and expectations of further Fed easing are all supporting gold," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

U.S. President Donald Trump's threats to impose 100% tariffs on Chinese goods, a rollout of tit-for-tat port fees by the two biggest economies and a broader macro trend of de-dollarization could push gold to $5,000/oz by mid-next year, Grant added.

Trump is set to meet Chinese leader Xi Jinping in South Korea later this month, Treasury Secretary Scott Bessent said on Monday, after China's rare earth export crackdown and Trump's triple-digit tariff threat roiled markets.

Investors now await Fed Chair Jerome Powell's speech at the NABE annual meeting at 12:20 p.m. ET for further clues on monetary policy. Markets expect a 25-basis-point rate cut at the Fed meeting this month, followed by a similar reduction in December.

Non-yielding gold tends to do well in low-interest-rate environments.

Spot silver, buoyed by the same factors driving gold and tightness in the spot market, hit a record of $53.60/oz before retreating 1.2% to $51.71.

The pullback reflects an overheated market, but silver should remain well-supported if gold's rally continues, Commerzbank analysts wrote in a note.

Platinum fell 0.7% to $1,634.05, while palladium rose 2.4% to $1,510.34.