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Gold rises as Fed cuts interest rates
Gold prices gained nearly 2% on Thursday, supported by the Federal Reserve's interest rate cut and continued investor uncertainty over the outcome of the U.S.-China trade deal.
Spot gold rose 1.9% to $4,003.62 an ounce.
U.S. gold futures for December delivery settled 0.4% higher at $4,015.90 an ounce.
President Donald Trump announced on Thursday that he would reduce tariffs on Chinese goods from 57% to 47% in exchange for Beijing resuming purchases of U.S. soybeans and rare earth exports, and cracking down on illicit fentanyl trade.
"We saw some weakness (in gold)... but as the details (of the U.S.-China deal) emerged and people realized it was a complete dead letter, we saw markets pull back from any optimism about an end to the trade wars," said Jeffrey Christian, managing partner at CPM Group.
Stock markets fell on concerns that the truce might be short-lived.
Meanwhile, the US Federal Reserve cut interest rates on Wednesday, in line with market expectations, but indicated that this could be the last cut this year, as the ongoing government shutdown threatens the availability of key economic data.
Gold, as a safe haven, becomes more attractive in a low-interest-rate environment because it is a non-yielding asset. It also tends to thrive during periods of geopolitical and economic uncertainty.
Wells Fargo Investment Institute raised its end-of-2026 gold price target to a range of $4,500 to $4,700 per ounce, up from $3,900 to $4,100 per ounce previously, citing geopolitical and trade uncertainty.
“We expect these uncertainties to continue to support private and official demand and push prices higher,” analysts said in a note.
In other markets, spot silver prices rose 2.3% to $48.64 an ounce, platinum rose 1.1% to $1,603.36, and palladium rose 2% to $1,439.43.
