Gold prices surged to a new record, surpassing $4,230 per ounce, driven by a confluence of factors including safe-haven demand amid growing economic anxieties, increasing expectations of a more accommodating monetary policy by the US Federal Reserve, and a weaker US dollar. Geopolitical tensions related to trade and export restrictions further supported the precious metal’s ascent.
- Gold prices rose above $4,230 per ounce, reaching a new record high.
- Safe-haven demand is a primary driver of the price increase.
- Growing expectations of a dovish US monetary policy are supporting gold.
- Investors are pricing in a 25 bps rate cut at this month’s meeting, with another likely in December, following remarks by Fed Chair Jerome Powell.
- A weaker US dollar is making gold more attractive to foreign buyers.
- US officials are denouncing China’s tighter rare earth export restrictions, raising concerns about global supply chains.
- Treasury Secretary Scott Bessent suggested possible US countermeasures, including export limits or tariffs on China’s Russian oil imports.
- The ongoing government shutdown poses risks to the US economy and contributes to market jitters.
The convergence of economic and political uncertainties suggests a favorable environment for gold. Anticipated monetary easing by the Federal Reserve is weakening the dollar, thereby making the asset more appealing to international investors. Further, geopolitical tensions, such as concerns about export restrictions and the protracted government shutdown, are driving investors towards safe-haven assets, and supporting this trend.