Gold soars past $4,200 an ounce for the first time as trade tensions and shifting interest rates ignite global market volatility
Gold breaks $4,200 per Ounce for the first time as Fed rate cut bets, trade war fears, and US shutdown concerns boost safe-haven demand
Gold prices surged past US$4,200 per ounce for the first time on Wednesday, October 15, 2025, driven by expectations of upcoming interest rate cuts by the US Federal Reserve, renewed US–China trade tensions, and fears of a potential US government shutdown.
According to Reuters, spot gold jumped 1.4% to $4,200.11 per ounce at 06:59 GMT, while US gold futures for December delivery rose 1.3% to $4,218.00.
Matt Simpson, Senior Analyst at StoneX, said: “The US government shutdown and dovish remarks from Fed Chair Jerome Powell are the latest catalysts accelerating gold’s rally.”
President Donald Trump announced on Tuesday that his administration planned to release a list of “Democrat projects” on Friday that would be suspended as a result of the federal government shutdown.
In a recent speech, Powell acknowledged continued weakness in the US labour market, despite signs that the broader economy may be performing better than expected. He added that interest rate decisions would be made “meeting by meeting” to balance labour-market softness against persistently high inflation.
Investors are now pricing in a 0.25% rate cut at both the October and December Fed meetings — a move seen as almost certain.
Gold tends to perform strongly in low-interest-rate environments and during periods of political and economic uncertainty. The precious metal has rallied 59% since the start of the year, supported by geopolitical tensions, expectations of rate cuts, strong central bank buying, reduced dollar holdings, and sustained ETF inflows.
Simpson added that “the rally has now turned into momentum trading, with traders chasing prices as they continue to surge.”
Meanwhile, Trump also said Washington was considering partial trade disengagement with China, including restrictions on vegetable oil imports, as both nations imposed retaliatory port tariffs on Tuesday.
The International Monetary Fund (IMF) recently raised its 2025 global growth forecast, citing better-than-expected trade and financial conditions. However, it warned that renewed US–China trade tensions could pose a major drag on global growth.
Elsewhere, silver prices jumped 2% to $52.48, after hitting an all-time high of $53.60 on Tuesday, supported by tightening supply and the broader surge in precious-metal markets.
