Gold breaks USD 4,100 to hit high on trade jitters, rate-cut optimism

Gold broke through USD 4,100 per ounce for the first time on Monday, hitting another record high on renewed US-China trade tensions and expectations of US interest rate cuts, while silver also rose to an all-time high.

Spot gold was up 2.2% to USD 4,106.48 per ounce, as of 01:47 p.m. ET (1747 GMT), after hitting a record USD 4,116.77.

US gold futures for December settled 3.3% higher at USD 4,133.

Gold has climbed 56% this year and scaled the USD 4,000 milestone for the first time last week, driven by factors including geopolitical and economic uncertainties, expectations of US interest rate cuts and robust central bank buying.

“Gold could easily continue its upward momentum. We could see prices north of USD 5,000 by the end of 2026,” said Phillip Streible, chief market strategist at Blue Line Futures.

Steady central bank purchases, firm ETF inflows, US-China trade tensions and the prospect of lower US interest rates are providing structural support for the market, Streible added.

On the geopolitical front, US President Donald Trump reignited trade tensions with China on Friday, ending an uneasy truce between the world’s two largest economies.

Meanwhile, traders are pricing in a 97% probability of a 25-basis-point Federal Reserve rate cut in October and a 100% chance for December. Gold, a non-yielding asset, tends to do well in low-interest-rate environments.

Analysts at Bank of America and Societe Generale now expect gold to reach USD 5,000 in 2026, while Standard Chartered has raised its forecast to an average of USD 4,488 next year.

“This rally has legs in our view, but a near-term correction would be healthier for a longer-term uptrend,” said Suki Cooper, global head, commodities research at Standard Chartered Bank.

Spot silver rose 3.1% to USD 51.82, touching a record high of USD 52.12 earlier in the session, buoyed by the same factors supporting gold and spot market tightness.

Technical indicators show both are overbought, with the relative strength index (RSI) at 80 for gold and 83 for silver.

Platinum rose 3.9% to USD 1,648.25, and palladium gained 5.2% to USD 1,478.94.

(Reporting by Noel John, Pablo Sinha, and Sherin Elizabeth Varghese in Bengaluru; Additional reporting by Kavya Balaraman; Editing by Joe Bavier, Alexander Smith, and Shreya Biswas)