Gold hit a record high on Thursday as investors sought refuge in the metal amid persistent geopolitical and economic uncertainties, with expectations of U.S. rate cuts and a weaker dollar adding support.
Spot gold rose 0.4% to $4,224.79 per ounce, as of 0033 GMT, after hitting a record high of $4225.69.
U.S. gold futures for December delivery gained 0.9% to $4,239.70.
Bullion, often seen as a safe-haven asset during periods of uncertainty, which tends to do well in low-interest-rate environment, has surged 61% year-to-date.
The U.S. dollar index edged down 0.1%, trading near a one-week low and making dollar-priced gold cheaper for foreign buyers.
U.S. officials on Wednesday criticised China’s expanded rare earth export controls, describing them as a threat to global supply chains, while signaling potential retaliatory measures.
The U.S. and China introduced reciprocal port fees on each other’s ships earlier in the week, escalating tensions in the ongoing trade dispute.
Bessent added Washington had further measures it could deploy, including export controls, if Beijing proceeded, and was also ready to tariff China over its purchases of Russian oil, as long as European partners joined in.
The federal government shutdown, now in its second week, is estimated to cost the U.S. economy $15 billion daily in lost output, Bessent said on Wednesday.
A federal judge in California has ordered the Trump administration to halt mass layoffs of federal workers during the partial shutdown.
The gold rally is attributed to a combination of factors, including geopolitical risks, expectations of interest rate cuts, increased central bank purchases, de-dollarization, and robust inflows into gold-backed exchange-traded funds.
Investors anticipate a near-certain 25-basis-point rate cut at this month’s Federal Reserve meeting, followed by another in December.
Holdings of the SPDR Gold Trust, the largest gold-backed ETF, increased 0.11% to 1,022.60 tonnes on Wednesday compared with Tuesday.
Spot silver was up 0.2% at $53.16 per ounce, after hitting a record high of $53.60 on Tuesday, tracking gold’s rally and short squeeze in spot market.
Elsewhere, platinum gained 0.7% at $1,665.70 and palladium was down 0.3% at $1,540.36.
