Gold price climbs to record on US-China tensions and US Fed rate-cut bets

The gold price rose to a record as heightened US-China frictions and bets that the US Federal Reserve will press on with monetary easing through the end of the year supported demand.

Gold price has risen about 5% so far this week and touched a peak above $4,227 an ounce amid a "US-China trade war" and prospects of an outsized US Fed rate cut. (Bloomberg)

Spot gold price was 0.3% higher at $4,218.74 per ounce in Singapore. The Bloomberg Dollar Spot Index dipped 0.2%, falling for a third day. Platinum was flat, while palladium edged higher.

The silver market, meanwhile, is gripped by a lack of liquidity in London, sparking a worldwide hunt for the metal and driving benchmark prices to soar above futures in New York. Prices touched a record above $53 an ounce this week and were little changed on Thursday.

(You can check gold prices and silver rates in your city using the hyperlinks.)

Traders are piling into wagers calling for at least one outsized US Fed rate cut by the year-end, while Fed Chair Jerome Powell signaled this week the central bank is on track to deliver another quarter-point reduction later this month. Lower borrowing costs tend to benefit precious metals, as they don’t pay interest.

President Donald Trump declared the US was now locked in a trade war with China, spurring fears of prolonged damage to the global economy that could boost gold’s haven appeal, even as Treasury Secretary Scott Bessent proposed a longer pause before raising tariffs further.

The ongoing US government shutdown has also aided bullion, as has the so-called debasement trade, where investors pull away from sovereign debt and currencies to protect themselves from runaway budget deficits. Enthusiastic central-bank buying has been another key pillar, underpinning a surge of more than 60% in gold so far this year.

Much of the rally “is being driven by physical buying, and if you look at central banks, they are going out and buying huge quantities,” said Saad Rahim, chief economist at Trafigura Group. Fears of debt sustainability and the prospect of lower rates have investors “looking to gold as a store of value and for safety,” he said.