Spot Gold registered a fresh all-time high of $4,200.30/oz. on Wednesday, supported by expectations of more Federal Reserve interest rate cuts this year, the US government shutdown and renewed US-China trade tensions.
Federal Reserve Chair Jerome Powell said on Tuesday the US labor market was still subdued, but the economy “may be on a somewhat firmer trajectory than expected.”
The Fed chief also noted rate decisions would be made on a “meeting-by-meeting” basis, balancing labor market weakness with elevated inflation.
Markets are now pricing in about a 96% chance of a 25 basis point Fed rate cut in October and a 95% chance of another 25 bps cut in December.
Meanwhile, US President Donald Trump announced yesterday his administration would produce a list of “Democrat programmes”, which will be closed due to the federal government shutdown.
The latter 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.
On the trade front, Trump said the US was considering cutting some trade ties with China, including in cooking oil.
Spot Gold was up 1.39% on the day to trade at $4,200.19 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve, robust ETF inflows and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 60.05%.
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