December futures on the New York Mercantile Exchange (COMEX) rose 2.47% in trading on Thursday, October 16, to peak at $4305.5 per ounce. Silver prices also rose to a record high. December futures for the metal rose by 4.34% to $53.615 per ounce
This is due to several factors at once – the escalation of the trade war between the U.S. and China, the expectation of the Fed rate cut and the U.S. government shutdown.
Ptak, U.S. President Donald Trump said the U.S. was caught up in a trade war with China, raising fears of possible lasting damage to the global economy. Following China’s decision to strengthen export controls on a number of rare earth metals, Trump announced the imposition of 100 percent duties on Chinese goods over and above the rate that is already in effect now (30 percent, in turn Beijing applies countervailing 10 percent duties).
In addition, according to Bloomberg, the cost of gold is supported by the ongoing US shutdown and the so-called “debasement trade” (debasement trade) – a strategy where investors get rid of sovereign debts and currencies to protect themselves from uncontrolled budget deficits.
Central banks’ purchases of gold were also an important factor in the precious metal’s appreciation, driving up prices by more than 60% since the beginning of the year.
Goldman Sachs analysts expect gold prices to rise to $4900 per ounce by December 2026 instead of the previous forecast of growth to $4300. Bank of America forecasts that next year gold will reach $5000 per ounce at an average annual price of $4400.
