Gold Prices Rise Near $4,200 an Ounce

Sada News - Gold reached a new record level near $4,200 an ounce on Wednesday, supported by rising expectations of further cuts to U.S. interest rates, while renewed concerns about trade relations between the U.S. and China contributed to increased demand for safe havens.

Spot gold recorded a rise of 0.8%, reaching $4,173.56 an ounce by 02:52 GMT, after earlier in the session touching a record level of $4,186.68. Gold futures for December delivery rose by 0.7% to $4,192.90.

U.S. President Donald Trump stated on Tuesday that his administration intends to release a list on Friday of "democratic programs" that will be shut down due to the partial government shutdown.

Matt Simpson, chief analyst at StoneX, explained that "the government shutdown in the U.S. and dovish statements from Jerome Powell have been the latest factors driving gold prices to accelerate upwards."

Federal Reserve Chairman Jerome Powell confirmed that the U.S. labor market remains calm, even though the economy "may be on a stronger path than previously expected," noting that interest rate decisions will be made on a "meeting by meeting" basis, balancing labor market weakness against persistently high inflation above target.

Investors currently expect a 25 basis point rate cut at the meetings in October and December, as low interest rate environments typically support gold prices, especially during periods of political and economic uncertainty.

Gold has gained 59% since the beginning of the year, supported by several factors including geopolitical and economic uncertainty, expectations of U.S. interest rate cuts, central bank purchases, a trend away from the dollar, and strong flows into exchange-traded funds.

Simpson stated that "this rise has also transitioned into momentum trading, as traders rush into the market to chase high prices."

For his part, Trump mentioned that Washington is considering reducing some trade ties with China, including in the cooking oils sector, while both sides began imposing mutual port fees on Tuesday.

The International Monetary Fund raised its forecasts for global economic growth in 2025, citing an unexpected improvement in conditions related to tariffs and financial circumstances, but at the same time warned that renewed trade tensions between the U.S. and China could limit growth.

Silver also rose by 0.3% to $51.60, after reaching a record level of $53.60 on Tuesday, supported by gold's trajectory and tightening supply in the spot market.

In other metals markets, platinum rose by 0.8% to $1,650.65, while palladium increased by 0.2% to $1,528.50.