Gold prices climbed to a new all-time high, approaching the $4,200-per-ounce mark on Wednesday. The rally was driven by expectations of additional U.S. interest rate cuts and rising U.S.-China trade tensions, which have boosted demand for safe-haven assets.
According to Mettis Global, spot gold rose 1.97% to $4,185.76 per ounce as of 10:58 a.m. PST. Meanwhile, December U.S. gold futures advanced 0.8% to settle at $4,197.50 per ounce, reinforcing bullish market sentiment.
Investor Confidence Grows on U.S. Policy Shifts
Meanwhile, market sentiment strengthened after U.S. President Donald Trump announced plans to release a list of “Democrat programmes” to be shut down on Friday amid the ongoing federal government closure. The political uncertainty further encouraged investors to shift toward safer assets like gold.
Importantly, Federal Reserve Chair Jerome Powell acknowledged that while the U.S. labour market remains weak, the overall economy is showing a “somewhat firmer trajectory than expected.” He emphasized that interest rate decisions will continue to be made meeting by meeting, balancing soft employment trends against inflation pressures that remain above the Fed’s target.
Investors Expect Two Rate Cuts by Year-End
Moreover, investors are now nearly fully pricing in 25-basis-point interest rate cuts in both October and December, according to market projections. Expectations of monetary easing have played a major role in gold’s continued rally this year.
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