Gold prices soared to a record high on Wednesday. Strong safe-haven demand and expectations of a U.S. rate cut fueled the rally.
Spot gold climbed 0.9% to $3,891.96 per ounce by 08:44 GMT. Earlier, it touched a new peak of $3,895.09. U.S. gold futures for December also gained 1.2%, reaching $3,918.60.
Dollar Weakness Supports Gold
The dollar index slipped 0.2% against major peers, its weakest level in a week. This drop made dollar-priced gold cheaper for global buyers. As a result, overseas demand for the precious metal strengthened further.
Analyst Ricardo Evangelista noted the dollar is weakening due to expectations of a dovish Fed. The U.S. government shutdown, triggered by failed budget talks, has also raised concerns about economic growth.
The shutdown risks delaying important data releases, including Friday’s non-farm payrolls report. Without timely data, investors focus more on safe-haven assets like gold.
Investors Eye Fed Decision
Analysts believe the Federal Reserve may cut rates soon. Carsten Menke of Julius Baer said U.S. policy remains restrictive and could slow growth. Therefore, lowering rates may help align policy closer to neutral levels.
Investors now price in a 95% chance of a Fed cut this month, according to the CME FedWatch Tool. This expectation further boosts demand for non-yielding assets like gold.
Meanwhile, other precious metals also gained. Spot silver jumped 1.5% to $47.39 per ounce, its highest in 14 years. Platinum rose 0.6% to $1,583.75, while palladium increased 0.5% to $1,263.44.
Gold continues to shine as uncertainty grows, offering investors both safety and value.
