Gold Surges Past $4,100 Amid Trade Tensions

By Staff, Agencies

Gold surged to new record levels on Monday, with spot prices climbing 1.8% to $4,106.48 per ounce and briefly touching $4,116.77, driven by renewed US-China trade frictions and mounting anticipation of Federal Reserve interest rate cuts.

US gold futures for December delivery also advanced 3.3% to $4,133, extending one of the strongest bull runs in decades.

After a remarkable rally this year, gold has now gained 56% year-to-date, surpassing the $4,000 milestone for the first time just last week. The metal’s momentum has been powered by economic uncertainty, aggressive central bank purchases, expectations of monetary easing, and geopolitical volatility.

Analysts note that the rally is also being reinforced by a weaker US dollar, sticky inflation, and robust inflows into gold-backed Exchange-Traded Fund [ETFs].

"Gold may continue to climb. We could see prices surpass $5,000 per ounce by the end of 2026," Phillip Streible, Chief Market Strategist at Blue Line Futures, told The Nation.

He added that the market remains supported by "central bank buying, strong ETF inflows, US-China trade tensions, and lower US interest rate trends."

Global markets wavered after Trump reignited the US-China trade dispute last week, ending a fragile truce with new tariff threats and tech export restrictions, raising fears of a wider economic slowdown.

The escalation pushed investors toward safe havens like gold, US Treasuries, and the Swiss franc. FXStreet analysts said fears of a trade breakdown added to market fragility from weak manufacturing and rising protectionism.

Traders see a 97% chance of a 0.25% Federal Reserve rate cut in October and 100% in December, expecting easing to continue into 2026.

With borrowing costs and real yields falling, gold’s appeal as a non-yielding asset grows. A weaker US dollar—at its lowest in nine months—also boosts demand from overseas buyers.

Lower yields and a weaker dollar have boosted gold’s appeal, with central banks—especially in China, Turkey, and India—buying at the fastest rate in over 50 years, analysts at Investopedia noted.

Leading financial institutions remain bullish. Bank of America and Société Générale both forecast that gold could reach $5,000 per ounce by 2026, while Standard Chartered raised its 2025 average price projection to $4,488.

Suki Cooper, Head of Global Commodities Research at Standard Chartered, told The Nation that "the current rebound is highly probable, with short-term corrections potentially supporting long-term gains."

Gold’s rise boosted precious metals: silver jumped 3.1% to $51.82, platinum gained 3.9% to $1,648.25, and palladium rose 5.2% to $1,478.94.

Still, traders warned of overbought conditions, as technical indicators such as the Relative Strength Index [RSI] reached 80 for gold and 83 for silver, suggesting potential for near-term pullbacks after the steep rally.

Gold’s record rise reflects growing investor caution amid geopolitical and economic uncertainty, with central banks diversifying from the US dollar amid debt and de-dollarization concerns.

At the same time, stubborn inflation and mining supply limits support higher gold prices. With real yields low and expected policy easing, analysts predict gold’s strength will continue into 2026.