Gold price today hits record high of $4,379, on track to log biggest weekly gain since 2008 - here's why

Gold prices today touched a record high as investors ran for a safe haven amid fears about credit quality in the US economy as well as rising frictions between Washington and Beijing on trade issues.

Gold bullion prices rose as much as 1.2 per cent to $4,379.93 an ounce on Friday, reaching a $30 trillion market capitalisation. This put it on track to record its highest weekly gain since 2008, while extending a breakneck rally that began in August.

The buying spree of gold among investors can also be related to rumours that the Federal Reserve could deploy an outsized rate cut this year.

Silver prices hit record high

Silver, too, smashed an all-time high this week on a now-defunct contract overseen by the Chicago Board of Trade. Prices for the white metal edged higher to hit a fresh peak at $54.3775 an ounce on Friday, before paring gains.

Palladium and platinum were also on track for hefty weekly advances.

Why are gold prices rising?

Gold prices are rising to record highs every day due to several factors. Here are the reasons why prices of gold touched a new high today:

• The broader markets in the US were left in a shock on Thursday as two regional lenders disclosed problems with loans involving allegations of fraud, fuelling concerns of emerging cracks in the creditworthiness of borrowers.
• The reports shook the markets less than a week after renewed US-China trade tensions, which have since triggered investors to look for safe havens and invest in commodities like gold.

• These factors were coupled by an ongoing uneasiness caused by the dearth of economic data during the shutdown in Washington. A combination of these jitters are boosting gold prices across the globe.
• Traders are also piling into wagers on at least one jumbo US rate cut by year-end, while Fed Chair Jerome Powell signaled this week the central bank is on track to deliver another quarter-point reduction this month. That would benefit precious metals, which don’t pay interest.

Gold prices surge 165% in 3 years

Gold prices have surged by 165.61 per cent over the past three years, according to data from Spectator Index.

Three years ago in 2022, gold rates topped $1,649 per ounce. That is a surge of more than double in three years, when gold rates have touched an all-time-high of nearly $4,380 today.

This year itself, gold has surged over 65 per cent, underpinned by central bank buying, inflows to exchange-traded funds and soaring demand for haven assets in the face of geopolitical and trade tensions, rising fiscal and debt levels, and threats to the Fed’s independence.