Gold Prices Surge Toward Record Levels
Gold (XAU/USD) extended its rally in early Asian trading on Monday, moving closer to the $4,050 per ounce mark as global investors sought safety amid renewed U.S.–China trade tensions and growing expectations of interest-rate cuts by the U.S. Federal Reserve.
The metal’s continued strength underscores its position as a safe-haven asset during periods of economic uncertainty, inflation risk, and currency volatility.
Trade War Fears Ignite Safe-Haven Flows
Gold’s bullish momentum was fueled by U.S. President Donald Trump’s announcement of 100% tariffs on Chinese imports effective November 1, reigniting fears of a full-scale trade war.
In response, China warned that it would retaliate if the new duties were implemented, heightening global risk aversion.
“Renewed trade hostilities could weaken the U.S. dollar and strengthen investor appetite for safe-haven assets like gold,” noted Tai Wong, independent metals trader.
Federal Reserve Rate Cut Expectations Add Momentum
The CME FedWatch Tool shows markets pricing in a 97% probability of a 25-basis-point rate cut in October, with an additional 92% chance of another reduction in December.
Lower interest rates typically reduce the opportunity cost of holding non-yielding assets such as gold, giving further upside support to prices.
Upcoming Economic Data in Focus
Investors are closely watching upcoming U.S. Retail Sales and Producer Price Index (PPI) data releases later this week.
Stronger-than-expected inflation readings could temporarily boost the U.S. dollar and cap gold’s gains, but persistent uncertainty over monetary policy and global trade is expected to keep gold well supported in the medium term.
Gold’s Timeless Role in Portfolios
Gold remains a cornerstone of wealth preservation strategies.
It is widely viewed as a hedge against inflation, currency depreciation, and geopolitical instability, offering stability when traditional financial markets face turbulence.
For investors and institutions, the current macroeconomic backdrop continues to highlight the importance of diversification into physical and digital gold assets.
CMC Market Outlook
The Combined Mining Company (CMC) Research Desk maintains a bullish outlook on gold in the short-to-medium term.
If prices sustain above the $4,050 resistance zone, further upside toward $4,100–$4,150 per ounce could be achievable.
However, any easing of trade tensions or unexpectedly strong U.S. economic data may trigger brief profit-taking.
Key Takeaways
- Gold price forecast (XAU/USD): Trading near $4,040 with upside bias.
- Drivers: U.S.–China trade escalation, expected Fed rate cuts.
- Resistance: $4,050; Support: $3,980.
- Outlook: Bullish while risk sentiment remains fragile.
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