Gold prices surged to a new all-time high on Monday as investors sought safety amidst renewed tariff threats by US President Donald Trump against China. The escalating tensions, coupled with expectations of US interest rate cuts, boosted the appeal of the precious metal.
Silver prices also hit a record high, following the upward trend set by gold.
At 0825 GMT, spot gold rose by 1.4 percent to $4,074.02 per ounce, reaching a peak of $4,078.05 per ounce. Meanwhile, US gold futures for December delivery jumped by 2.3 percent to $4,093.50.
Trump’s recent actions reignited trade tensions with China, as he threatened to impose 100 percent tariffs on Chinese imports and announced new export controls on critical software by November 1. Despite this, Trump reassured the public on Truth Social, stating, “Don’t worry about China, it will all be fine!”
According to UBS analyst Giovanni Staunovo, trade tensions between the US and China continue to be a focal point for markets, with the threat of additional tariffs still looming. Staunovo also noted that strong investment and central bank demand are expected to provide further support for gold, with a target price of $4,200 per ounce.
Spot silver prices surged by 2.2 percent to $51.37 per ounce, hitting $51.70 per ounce, driven by similar factors influencing gold prices and tightness in the spot market. Goldman Sachs predicted a rise in silver prices in the medium term due to private investment inflows but cautioned about near-term volatility and downside risks compared to gold.
Both gold and silver have Relative Strength Index values of 80 and 83, respectively, indicating that the metals are currently overbought.
Gold, a non-yielding asset, has experienced a 53 percent increase year-to-date, driven by geopolitical uncertainties, robust central bank gold purchases, inflows into exchange-traded funds, expectations of Federal Reserve rate cuts, and economic uncertainties arising from tariff issues.