Gold Rally Hits $4,100 Milestone Amid U.S.–China Tensions and Fed Pivot Expectations

Gold prices leapt to a record high above USD 4,100 per ounce on Tuesday, driven by rising expectations that the U.S. Federal Reserve will begin cutting interest rates this month and renewed safe-haven demand amid escalating trade tensions between the U.S. and China. 

By 08:05 GMT, spot gold had risen ~0.5% to USD 4,128.49 per ounce, after reaching an intraday peak of USD 4,179.48.  U.S. gold futures for December delivery were up ~0.3%, trading at USD 4,144.10.

So far this year, gold has surged ~57% amid a combination of geopolitical uncertainty, dovish rate expectations, strong central bank purchases, and inflows into exchange-traded funds. 

“Renewed concerns over a global trade war have pushed gold above the psychological USD 4,100 level,” said Han Tan, chief market analyst at Nemo.money. “The next leg up towards mid-USD 4,000 territory may require dovish surprises out of this month’s FOMC meeting.” 

Meanwhile, tensions between the U.S. and China are again intensifying. U.S. Treasury Secretary Scott Bessent confirmed that President Donald Trump intends to meet Chinese leader Xi Jinping in South Korea later this month.  The two nations also plan to impose port fees on ocean shipping firms transporting goods — from crude oil to retail imports.

Analysts at Bank of America and Société Générale now expect gold to reach USD 5,000 per ounce by 2026, reflecting their bullish outlooks given escalating safe-haven demand and a potentially dovish Fed. 

Silver also reacted strongly: spot silver dipped slightly (~0.1%) to USD 52.27, after earlier touching a record high of USD 53.60. The rally in silver has been amplified by a “short squeeze” in London markets, coupled with strong demand from both industrial and safe-haven markets. 

Other precious metals saw gains too: platinum rose ~0.6% to USD 1,654.65, and palladium added ~0.2%, reaching USD 1,477.95.

Investors are now closely watching Fed Chair Jerome Powell’s remarks at the upcoming NABE (National Association for Business Economics) annual meeting, seeking hints on the Fed’s policy path. Meanwhile, Philadelphia Fed head Anna Paulson cited rising labor market risks as another argument for future rate cuts.

Since gold pays no yield, its allure typically increases in a low or falling rate environment — a context that currently favors the precious metal.

Why Gold Is Soaring: Key Drivers

Rate Cut Expectations

Markets widely expect the U.S. central bank to begin trimming rates soon. This expectation weakens real yields and makes non-yielding assets like gold more attractive. 

Safe-Haven Demand under Geopolitical Stress

Trade friction between the U.S. and China has reignited fears of disruption to global supply chains, driving capital toward safe assets like gold. 

Central Bank Purchases & ETF Inflows

Central banks continue accumulating gold, and inflows into gold-backed ETFs remain robust — helping to sustain upward pressure on prices. 

Technical Momentum & Psychological Thresholds

Breaking the USD 4,100 mark has been a psychological trigger. Some technical analysts see further upside toward USD 4,300–4,470 in the near term. 

Risks and Challenges Ahead

Rate surprise: If the Fed surprises markets by staying hawkish, gold could face sharp reversals.

Profit-taking: After such a strong rally, short-term corrections are possible.

Dollar strength: A rebound in the U.S. dollar would weigh on dollar-denominated commodities.

Supply dynamics: Silver is more vulnerable due to its industrial demand and smaller market size.

Policy & regulatory uncertainty: Trade policy, tariffs, and global liquidity conditions may shift rapidly.

Outlook to 2026 and Beyond

Bullish forecasts have gained traction. Bank of America now targets USD 5,000/oz for gold in 2026, with average prices expected around USD 4,400. Société Générale mirrors this target. Standard Chartered has raised its 2026 average forecast to USD 4,488.

On the silver front, BofA sees silver potentially reaching USD 65/oz by 2026, citing tight supply and continued demand momentum. 

FAQs (Frequently Asked Questions)

1. Why did gold break above USD 4,100?
Gold surged past the USD 4,100 level due to a convergence of factors: mounting expectations of Fed rate cuts, renewed U.S.–China trade tensions, strong inflows into ETFs, and central bank buying. 

2. Is gold’s rally sustainable?
While the trend remains bullish, key risks include an unexpected hawkish turn by the Fed, profit-taking, or a rebound in the U.S. dollar. Short-term pullbacks are possible.

3. What level do analysts forecast for 2026?
Bank of America and Société Générale forecast prices reaching USD 5,000/oz by 2026. Standard Chartered’s average forecast is USD 4,488.