Danger Signals from Gold Prices?
Global gold prices remain near all-time highs amid escalating trade tensions between the United States and China, as well as market confidence that the Federal Reserve will cut interest rates again this year. This week alone, gold prices have risen nearly 5% and reached a record $4,218.29 per ounce on Wednesday. This increase is a continuation of the strong rally since mid-August.
Expectations of interest rate cuts have made gold increasingly attractive because the precious metal does not yield interest, but its value tends to stabilize amid uncertainty. Fed Chairman Jerome Powell signaled a quarter-point interest rate cut by the end of October. Meanwhile, US President Donald Trump declared that his country is now officially "locked in a trade war" with China, reinforcing fears of a global economic slowdown.
Other factors driving gold prices up include the US government shutdown, fears of a surging budget deficit, and massive buying by central banks. Investors are also becoming increasingly wary of debt risks and are seeking safe-haven assets like gold to protect their wealth. According to Trafigura Group, much of the surge in gold prices was driven by physical demand, particularly from central banks buying in large quantities.
In addition to gold, silver prices also experienced a sharp surge of up to 3.1% due to a supply shortage in the London market. This shortage triggered a global price surge, even causing silver prices on the spot market to surpass futures contracts in New York. Silver prices briefly reached a record high above $53 per ounce, reflecting surging global demand amid geopolitical tensions and economic pressures. (ads)
Source: Bloomberg
