Gold prices have surged to a new record high, driven by increasing tensions between the United States and China and expectations of further interest rate cuts by the Federal Reserve. Bullion reached a peak of $US4185 an ounce. Silver also saw gains after a volatile session, having briefly spiked to an all-time high above $US53.54 an ounce before retreating, suggesting a potential easing of a historic squeeze.
US Treasury yields fell to their lowest levels in weeks on Tuesday, following comments from Federal Reserve Chair Jerome Powell indicating that the central bank is likely to implement another quarter-point rate cut later this month. The prospect of lower yields and reduced borrowing costs generally supports precious metals, which do not offer interest payments.
Risk aversion has spread across markets, bolstering gold’s safe-haven appeal. This was amplified after US President Donald Trump suggested a potential halt to cooking oil trade with China. These remarks have escalated tensions between the world’s two largest economies.
Beijing has vowed to retaliate in response to Washington’s recent threat to impose an additional 100 per cent tariff on China last week, adding further uncertainty and fuelling demand for safe-haven assets like gold.
