Gold hits new high! Yellow metal surpasses $4,100 levels; investors pile on safe-haven demand

Gold reached a new record high on Tuesday, surpassing $4,100 levels, as investors bet on the US Federal Reserve rate cuts and react to renewed US-China trade tensions. Silver also hit life-time high, benefiting from the same safe-haven demand.Spot gold was up 0.2% at $4,117.72 per ounce at 07:16 GMT, after earlier touching $4,179.48, according to Reuters. US gold futures for December remained flat at $4,133.80. This year, the precious metal has jumped 57%, breaking through the $4,100 barrier for the first time on Monday.Meanwhile, silver dipped slightly by 0.5% to $52.07, after hitting a record $53.60, supported by tight market supply and the same factors driving gold.The rally in bullion is being fuelled by a mix of geopolitical uncertainties, expectations of interest rate cuts, strong central bank purchases, and robust inflows into exchange-traded funds.Bank of America and Societe Generale now see gold reaching $5,000 by 2026, while Standard Chartered raised its forecast for next year to $4,488.OANDA senior market analyst Kelvin Wong told Reuters, “The trade tensions are not the primary driver for the rally (today) as increasing bets for the Fed to continue its interest rate cut trajectory, reducing long-term funding costs eventually lowering the opportunity cost are (also supporting gold).”Philadelphia Fed chief Anna Paulson highlighted that rising risks in the labour market have strengthened the case for further rate cuts. Investors are also closely watching Fed Chair Jerome Powell’s speech at the NABE annual meeting for clues on future policy. Traders are pricing in a 99% chance of a 25-basis-point cut in October and a 94% chance in December.Meanwhile, US President Donald Trump is set to meet Chinese President Xi Jinping in South Korea later this month, according to the US treasury secretary Scott Bessent. Tensions escalated after China imposed wider rare-earth export controls last Thursday, prompting Trump to warn of a 100% tariff on Chinese goods and planned export controls on key US-made software, effective November 1, Reuters reported.Other precious metals were mixed, with platinum up 0.4% at $1,652.40, while palladium fell 0.7% to $1,465.00.