The latest inflation report, however, was muddled by a record six-week government shutdown that ended last month. Since delivering its third straight rate cut last week, the US Federal Reserve (Fed) has been ambiguous about the future pace of monetary easing. Traders are assigning a roughly 25% chance of a reduction in January, while US President Donald Trump has advocated aggressively lowering rates next year.
Geopolitical tensions have also enhanced gold’s haven appeal, with bullion supported this week by escalating tensions in Venezuela. Trump has ordered a blockade of all sanctioned oil tankers as he ratchets up pressure on Caracas amid a build-up of America’s military presence in the region.
Precious metals have been on a scorching rally this year, with both gold and silver set for their best annual performances since 1979. Silver has more than doubled and gold has jumped about two-thirds on a run underpinned by elevated central-bank buying and inflows into bullion-backed exchange-traded funds.
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Falling US interest rates have led exchange-traded fund investors “to start competing for limited bullion with central banks”, Goldman Sachs Group Inc analysts including Daan Struyven said in a note. “We expect the same two drivers — structurally high central-bank demand and cyclical support from Fed cuts — to lift the gold price further.”
Platinum, meanwhile, rose for a seventh straight session and has also more than doubled this year. The metal’s surge to above US$1,980 an ounce — the highest since 2008 — has come as the London market shows signs of tightening, with banks parking metal in the US to insure against the risk of tariffs. Exports to China have also been robust this year, with demand bolstered by the start of futures trading in Guangzhou.
Gold was steady at US$4,331.67 an ounce as of 8.26am in Singapore, up 0.7% for the week. It hit an all-time high above US$4,381 in October. Silver added 0.1% to US$65.51, near a record of US$66.89 set on Wednesday. Platinum advanced 1%, and palladium also climbed. The Bloomberg Dollar Spot Index was flat.
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