Gold prices started the week slightly higher after last week’s record rally. Expectations of interest rate cuts in the US and concerns about a government shutdown in Washington kept safe-haven demand alive, while investors focused on the upcoming US-China trade talks.
Spot gold rose 0.3% to $4,259.84 per ounce as of 12:00 GMT, while US December gold futures contracts rose 1.5% to $4,275. Spot silver also rose 0.5% to $52.12.
Saxo Bank Head of Commodity Strategy, Ole Hansen, said, “As long as gold stays above $4,000 and silver above $50, a strong upward trend in the market will continue.”
Trump Threatens 100% Tariff on China and FED Expectations
US President Donald Trump threatened Chinese goods with 100% tariffs. He said that the planned 100% tariffs were “unsustainable” and announced that he would meet with Chinese President Xi Jinping within two weeks. This meeting became the main topic of discussion in the gold market. Gold prices reached a historical high of $4,378.69 last week. However, they fell by 1.8% after Trump’s statements. Markets are now focused on the US CPI data to be released on Friday and the FED meeting on October 28-29. Analysts expect the Fed to cut interest rates by 25 basis points.
The Chinese economy showing its weakest growth in a year in the third quarter and weakness in the real estate sector are providing additional support to gold.
