Tensions between Washington and Beijing are pushing gold prices to record levels

Gold rose to a new record high on escalating tensions between the United States and China, and increasing bets that the US Federal Reserve will continue its monetary easing policy until the end of the year, fueling demand for the precious metal. Gold has risen about 5% since the start of the week, hitting a new high of more than $4,227 an ounce on Thursday, continuing the rapid rise that began in mid-August. The buying wave extended to other precious metals as silver rose more than 3% on Wednesday amid a shortage of supplies in the London market. Traders are betting on at least one major cut in US interest rates by the end of the year, while Federal Reserve Chairman Jerome Powell signaled this week that the central bank was on track to approve another quarter-percentage point cut later this month. Low borrowing costs are a supporting factor for gold and precious metals because they do not earn interest. US President Donald Trump’s announcement that his country has entered into a trade war with China has raised fears of long-term damage to the global economy, raising the appeal of gold as a safe haven, even as Treasury Secretary Scott Besent has proposed extending the waiting period before imposing additional tariffs. The US government shutdown increases the rise in prices. The partial shutdown of the US government has helped boost demand for gold, in addition to what is known as the “devaluation deal”, as investors move away from sovereign debt and currencies to protect their assets from the growing financial deficit. Expanded central bank purchases also helped support the rally, as gold prices rose more than 60% since the start of the year. Saad Rahim, chief economist at Trafigura Group, said that much of the current rally “is driven by real purchases, and if you look at central banks, they are buying large amounts.” He added that concerns about debt sustainability and the prospect of interest rate cuts are driving investors to gold as a store of value and a safe haven. Spot gold rose 0.3% to $4,218.74 an ounce at 8:48 a.m. in Singapore, while the Bloomberg Dollar Index fell 0.2% for the third day in a row. Platinum remained stable, while palladium rose slightly. As for the silver market, it is suffering from a lack of liquidity in London, which has led to a global race to buy the metal, pushing spot prices to exceed futures in New York. Prices hit a record high above $53 an ounce this week, and were little changed on Thursday.