[BENGALURU] Gold hit a record high on Thursday (Oct 16) as investors sought refuge in the metal amid persistent geopolitical and economic uncertainties, with expectations of US rate cuts and a weaker US dollar adding support.
Spot gold rose 0.4 per cent to US$4,224.79 per ounce, as at 8.33 am, after hitting a record high of US$4,225.69.
US gold futures for December delivery gained 0.9 per cent to US$4,239.70.
Bullion, often seen as a safe-haven asset during periods of uncertainty, which tends to do well in a low-interest-rate environment, has surged 61 per cent year-to-date.
The US dollar index edged down 0.1 per cent, trading near a one-week low and making dollar-priced gold cheaper for foreign buyers.
US officials on Wednesday criticised China’s expanded rare earth export controls, describing them as a threat to global supply chains, while signalling potential retaliatory measures.
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The US and China introduced reciprocal port fees on each other’s ships earlier in the week, escalating tensions in the ongoing trade dispute.
Bessent added that Washington had further measures it could deploy, including export controls, if Beijing proceeded, and was also ready to tariff on 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 US economy US$15 billion daily in lost output, Bessent said on Wednesday.
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The gold rally is attributed to a combination of factors, including geopolitical risks, expectations of interest rate cuts, increased central bank purchases, dae-dollarisation, and robust inflows into gold-backed exchange-traded funds.
Investors anticipate a near-certain 25-basis-point rate cut at this month’s US Federal Reserve meeting, followed by another in December.
Holdings of the SPDR Gold Trust, the largest gold-backed ETF, increased 0.11 per cent to 1,022.60 tonnes on Wednesday compared with Tuesday.
Spot silver was up 0.2 per cent at US$53.16 per ounce, after hitting a record high of US$53.60 on Tuesday, tracking gold’s rally and short squeeze in the spot market.
Elsewhere, platinum gained 0.7 per cent at US$1,665.70 and palladium was down 0.3 per cent at US$1,540.36. REUTERS
