Gold Continues Gains, Reaching New All-Time High
While the world's attention was focused on the developments in the Gaza crisis, gold was writing a new chapter in its history in financial markets, reaching record levels driven by the return of geopolitical and trade concerns that are pushing investors toward traditional safe havens.
Gold Sets Record Highs
Gold continued its gains during Asian trading on Monday, with the price rising to a new all-time high of $4,078 per ounce.
Gold wasn't the only bullish metal. Silver jumped more than 3% today, reaching a new all-time high of $51.68 per ounce.
Primary Drivers of the Rise
Gold's astonishing rise is being driven by a combination of economic and geopolitical factors that increase its appeal as a safe haven:
- Renewed Trade Tensions:
US President Donald Trump has threatened to impose 100% tariffs on Chinese goods, reigniting fears of global trade disruptions.
In response, China defended its restrictions on rare earth exports and warned that it was preparing similar measures to counter any new US tariffs.
- Interest Rate Cut Expectations:
Market expectations are almost certain to see a 25 basis point cut in the US interest rate at the October and December meetings, according to the FedWatch tool. Lower yields on yielding assets such as bonds increase the appeal of non-yielding gold.
- Strong Institutional Buying:
Reports indicate that gold-backed exchange-traded funds (ETFs) recorded record inflows of approximately 228 tons in the third quarter of this year, as heavy buying by central banks remains a strong support for prices.
- Continued US Government Shutdown:
Adding to market tensions, the US government shutdown continues for another week, leaving markets without many of the key economic indicators needed to assess the health of the economy.
Looking Ahead:
In light of these factors, the positive outlook for gold appears to be strengthening in the medium term. Goldman Sachs raised its gold price forecast for 2026 from $4,300 to $4,900 per ounce.
The yellow metal remains a preferred hedge against the risks of inflation, rising government debt, and declining confidence in monetary policy.
Thus, as the storm of war in Gaza subsides, financial markets are preparing for another storm of volatility, with gold as a safe haven and destination.
On Sunday, Trump declared that the Gaza war was over, coinciding with his brief visit to Tel Aviv, Israel, before heading to Egypt for the Sharm el-Sheikh summit.
