Gold is trading at a gain of more than 1% in mid-European trading, one hour before the opening of the US markets on Wednesday, October 15, recording a new record high of $4,210 per ounce. This is supported by rising expectations of a US interest rate cut and increased demand for safe havens amid declining risk appetite in the markets and economic and geopolitical uncertainty. The yellow metal is trading up approximately 1.12% at $4,188 per ounce, having tested the $4,210 level this morning. Silver is trading at $52.62 per ounce, up 2.27% after reaching a historic high of $53.55 on Tuesday.

The yellow metal is suffering from rising tensions due to threats between Washington and Beijing following the tariffs imposed by US President Donald Trump last week and China’s response with sanctions on US companies. Expectations indicate that Trump is considering severing some trade relations with China, in addition to the ongoing US government shutdown.

In addition to geopolitical tensions, gold is receiving support from rising expectations that the US Federal Reserve will cut interest rates in October and December. Markets are pricing in a 97% and 95% chance of a 25 basis point rate cut in October and December, respectively, according to the CME Fed Watch tool at the start of the week on Monday. This represents a more than 15% increase in December’s forecast compared to last week’s forecast.

US Treasury yields are rising today as expectations of a rate cut increase and trade concerns mount. Federal Reserve Chairman Jerome Powell indicated in his remarks on Tuesday that the bank is on track for another quarter-point cut later this month, bringing the two-year yield close to its lowest level since 2022 at 3.47%. The 10-year yield is trading at 4.01%, approaching its lowest level since early April, below 4%, benefiting from increased demand for safe haven assets.

On the economic data front, the Bayer State Manufacturing Survey, which measures industrial activity in New York State and was released just moments ago, showed an increase of approximately 10.7 points in October, compared to a decline of -8.7 in September, marking the third positive reading in the past four months, as new orders rose slightly.
The US dollar index fell by approximately 0.20%, with the index measuring the dollar against a basket of currencies (the Dollar Index) trading at 98.63, supporting the yellow metal’s gains.

Platinum, meanwhile, is trading at $1,659, up 1.29%, while palladium is up approximately 1.98%, trading at $1,554.