London: Gold prices have reached record highs, extending a powerful rally driven by investors seeking stability amid economic and geopolitical volatility.
The surge in gold prices reflects strong safe-haven demand and growing confidence that the US Federal Reserve will move towards additional interest rate cuts.
Spot gold has been trading 0.7 percent higher at $4,011.18 (£3,185) per ounce by 0300 GMT, while US gold futures for December delivery have gained 0.7 percent to $4,033.40 (£3,200) per ounce. Spot gold has jumped 53 percent year-to-date after a 27 percent rise in 2024, marking one of the strongest performances in decades.
Market analysts have said that multiple drivers are supporting gold prices, including robust central bank purchases, inflows into gold-backed exchange-traded funds, a weakening dollar, and persistent political uncertainty. Independent metals trader Tai Wong said that investor sentiment remains highly optimistic, and attention may now turn to the next potential milestone if the Fed continues easing monetary policy.
Political developments in France and Japan, as well as the continuing conflicts in Ukraine and the Middle East, have added to the appeal of gold as a defensive asset. Analyst Kyle Rodda from Capital.com said that Japan’s election outcome and the likelihood of deeper deficit spending have intensified the ‘run it hot’ narrative shaping current market trends.
Meanwhile, the US government shutdown, which has entered its seventh day, has disrupted the release of key economic data, further fueling uncertainty. Investors expect a 25-basis-point rate cut at the upcoming Federal Reserve meeting, followed by another in December.
KCM Trade Chief Market Analyst Tim Waterer said that falling interest rates and heightened uncertainty continue to benefit gold, though short-term profit-taking could occur near current record levels.
In other precious metals, spot silver has advanced 1.3 percent to $48.42 (38.50) per ounce, platinum has increased 2.5 percent to $1,658.40 (£1,320), and palladium has risen 1.8 percent to $1,361.89 ( £1,085). The rally in gold prices highlights how global investors are prioritising safety and tangible value amid shifting monetary and political landscapes.
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