Spot Gold scaled a new all-time high of $4,038.91/oz. on Wednesday, as broader geopolitical and economic uncertainty coupled with expectations of more Federal Reserve interest rate cuts heightened the safe-haven allure of the metal.
The ongoing US government shutdown has delayed the release of essential macro data, which complicated assessments of the US economy’s state, as investors had to rely on secondary, non-government data prints.
Despite that, markets are pricing in about a 95% chance of a 25 basis point Fed rate cut in October and an 82% chance of another 25 bps cut in December.
Last week, Fed Governor Stephen Miran once again expressed support for an aggressive rate cut trajectory because of the impact of the Trump administration’s economic policies.
On the other hand, Kansas City Federal Reserve Bank President Jeff Schmid indicated he was disinclined to further rate cuts, stating the central bank should remain focused on the danger of too-high inflation.
At the same time, data by the World Gold Council showed that global ETFs had registered an inflow of nearly $26 billion in September – a record amount for the month.
“Strong ETF demand remains key, driven by ‘FOMO’ and eroding trust in traditional safe havens,” Ole Hansen, head of commodity strategy at Saxo Bank, was quoted as saying by Reuters.
Spot Gold was last up 1.22% on the day to trade at $4,033.06 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 53.68%.
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