Gold nears record $4,200 as trade tensions boost demand

October 15, 2025 (MLN): Gold prices surged to a new record high, closing in on the $4,200-per-ounce mark on Wednesday, supported by growing expectations of additional U.S. interest rate cuts and rising concerns over U.S.-China trade relations that lifted demand for safe-haven assets.

Spot gold was up 1.97% at $4185.76 an ounce as of [10:58 am] PST, according to data reported by Mettis Global.

December U.S. gold futures climbed 0.8% to settle at $4,197.50 per ounce.

Market sentiment was further influenced by U.S. President Donald Trump’s remarks on Tuesday,  that his administration would unveil on Friday a list of “Democrat programmes” to be shut down amid the ongoing federal government closure.

Meanwhile, Federal Reserve Chair Jerome Powell noted that while the U.S. labour market remains soft, the broader economy appears to be on a “somewhat firmer trajectory than expected.” He reiterated that future interest rate decisions will continue to be determined “meeting by meeting,” balancing weak employment data against inflation that remains above target levels.

Investors are now almost fully pricing in 25-basis-point rate cuts in both October and December, according to market expectations.

Gold has soared 59% so far this year, driven by a combination of factors   persistent geopolitical and economic uncertainty, expectations of monetary easing in the U.S., record central bank purchases, growing moves toward de-dollarisation, and solid inflows into gold-backed exchange-traded funds (ETFs).

Adding to market jitters, Trump revealed that Washington is weighing potential curbs on trade with China, including restrictions related to cooking oil, as both nations began implementing mutual port fees earlier this week.

Separately, the International Monetary Fund (IMF) upgraded its 2025 global growth forecast, citing improving financial and tariff conditions. However, it warned that renewed tensions between the world’s two largest economies could once again pose risks to global economic stability.

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