15.10.2025 23:04
For the fourth consecutive session on Wednesday, the price of gold surged, climbing by over 1.40% to achieve an unprecedented high of $4,218. This significant rally is being fueled by escalating trade hostilities and widespread geopolitical instability, which are compelling investors to seek refuge in the precious metal's traditional safety.
Persistent ambiguity surrounding the trade accord between Washington and Beijing continues to sustain the bullish momentum for bullion. The situation intensified after the U.S. President suggested he was contemplating a reduction in some commercial ties with China, a response to a recent exchange of port tariffs between the two nations. Despite a proposal from U.S. Treasury Secretary Scott Bessent for a tariff truce aimed at resolving disputes over rare-earth minerals, traders disregarded the overture, decisively pushing the yellow metal beyond the landmark $4,200 milestone for the first time. According to market reports, a confluence of factors, including persistent geopolitical tensions, anticipation of interest rate cuts by the Federal Reserve, robust purchasing by central banks, and substantial inflows into exchange-traded funds, has contributed to a remarkable surge of over 60% in gold's value year-to-date.
The Federal Reserve's dovish posture has further bolstered the precious metal's appeal. On Tuesday, Fed Chair Jerome Powell acknowledged the prevailing weakness in the labor market and indicated that the central bank ought to shift towards a more "neutral" interest rate policy. Echoing this sentiment, the Fed's Beige Book, released in anticipation of the late October meeting, revealed that employment levels were largely stable, though hiring activity remained subdued across various regions and industries. Crucially, the report also highlighted emerging signs of stagflation, a challenging economic condition characterized by stagnant growth coupled with high inflation.
Looking ahead, the upward trajectory for gold prices is expected to persist, partly due to a light U.S. economic calendar that offers few potential catalysts for a reversal. The safe-haven demand is further amplified by domestic political friction, as the ongoing U.S. government shutdown enters its fifteenth day with no resolution in sight between the White House and Democratic leaders. This rally is also being significantly supported by a weakening U.S. Dollar, which makes the dollar-denominated commodity more attractive to international buyers.
