By Sherin Elizabeth Varghese and Pablo Sinha
(Reuters) -Gold notched a fresh record high above the $4,100 level on Tuesday, lifted by expectations of a rate cut this month by the U.S. Federal Reserve and an investor flight to safety after a flare-up in trade tensions between Washington and Beijing.
Spot gold rose 0.9% to $4,145.85 per ounce as of 1:50 p.m. ET (1750 GMT), after hitting a record high of $4,179.48 earlier in the session.
U.S. gold futures for December delivery gained 0.7% to settle at $4,163.40.
The metal has surged around 57% this year, breaking the $4,100 barrier for the first time on Monday.
Its rally has been driven by multiple factors, including geopolitical uncertainties, expectations of U.S. interest rate cuts, strong central bank buying and robust ETF inflows.
Analysts at Bank of America and Societe Generale now see gold reaching $5,000/oz in 2026.
“The uptick in U.S.-China trade tensions, the ongoing government shutdown, and expectations of further Fed easing are all supporting gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
U.S. President Donald Trump’s threats to impose 100% tariffs on Chinese goods, a rollout of tit-for-tat port fees by the two biggest economies and a broader macro trend of de-dollarization could push gold to $5,000/oz by mid-next year, Grant added.
Trump is set to meet Chinese leader Xi Jinping in South Korea later this month, Treasury Secretary Scott Bessent said on Monday.
Non-yielding gold tends to do well in low-interest-rate environments, and markets expect a 25-basis-point rate cut at the Fed meeting this month, followed by a similar reduction in December.
“Based on the data that we do have, it is fair to say that the outlook for employment and inflation does not appear to have changed much since our September meeting four weeks ago,” Fed Chair Jerome Powell said during his speech at the National Association for Business Economics annual meeting.
Spot silver, buoyed by the same factors driving gold and tightness in the spot market, hit a record high of $53.60/oz before retreating 0.9% to $51.86.
Platinum eased 0.3% to $1,640.76, and palladium rose 3.2% to $1,521.50.
(Reporting by Noel John, Pablo Sinha and Sherin Elizabeth Varghese in Bengaluru; Editing by Anil D’Silva, Sahal Muhammed, Nia Williams and Shreya Biswas)
