Gold stays above $4,000 as silver tops $50 for first time amid rally

Gold prices eased on Thursday as some investors booked profits, but remained above $4,000 per ounce, as expectations of US interest-rate cuts and persistent global uncertainties drove demand for the safe-haven asset.

Silver, spurred by momentum in the gold market, strong investment demand and an ongoing supply deficit, breached the psychological barrier of $50 per ounce for the first time.

Spot gold fell 0.5 per cent to $4,019.30 per ounce, by 1207 pm ET (1607 GMT). US gold futures for December delivery fell 0.9 per cent to $4,035.30.

"Speculators are taking some gold chips off the table as the Gaza ceasefire takes effect since it reduces the temperature in a historically volatile region," said Tai Wong, an independent metals trader.

 

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Israel and Hamas signed an agreement on Thursday to cease fire, the first phase of US President Donald Trump's initiative to end the war in Gaza.

"Overall, though, the faith in this trade is largely undiminished. However, this rally has been so rapid that no real support comes in until $3,850," Wong said.

Bullion surged past $4,000 per ounce for the first time on Wednesday, reaching a record high of $4,059.05. The non-yielding asset, which is traditionally considered a hedge during geopolitical and economic uncertainty, has gained more than 54 per cent this year.

Its rally has been fueled by geopolitical tension, robust central bank buying, rising ETF inflows, expectations of US rate cuts, and tariff-related economic uncertainties.

Minutes of the US central bank's September meeting, released on Wednesday, showed Federal Reserve officials agreed that risks to the US job market were high enough to warrant a rate cut, but remained wary amid stubborn inflation.

The Fed resumed its rate-cutting cycle in September, lowering the benchmark rate by 25 basis points.

Traders are now pricing in a 25 basis point cut in October with another in December, with a 95 per cent and 80 per cent chance, respectively. [FEDWATCH]

Silver was 2.6 per cent higher at $50.13 per ounce.

The price of the metal has risen more than 69 per cent this year, driven by the same macroeconomic forces fueling gold's rally and tight supply conditions in the spot market.

"Silver is playing a bit of catch up at this point, moving more aggressively to the upside than gold in recent sessions," said David Meger, director of metals trading at High Ridge Futures.

Platinum eased 0.2 per cent to $1,659.10 and palladium rose 1.8 per cent to $1,476.24.

(Reporting by Anushree Mukherjee, Kavya Balaraman and John Biju in Bengaluru; Editing by Arun Koyyur, Kirsten Donovan)