Bullion soared to a new all-time high above USD $4,100 per ounce for the first time on October 13, having raced above USD $4,000 for the first time in the prior week.
Gold and silver prices often correlate loosely, while silver can be more volatile than gold.
Gold is trading up more than 50 percent so far this year after a 27 percent jump in 2024.
The speed of the latest surge surprised many market analysts, who attributed much of the impetus to “safe haven” investor buying spurred by worries over renewed U.S.-China trade tensions, after President Donald Trump threatened 100 percent tariffs on China in response to Beijing imposing strict export controls on rare earth minerals, and widely held expectations of two more U.S. rate cuts this year, in October and December.
A climate of falling interest rates in the United States, the world’s largest economy, underpins the market for gold, which bears no yield.
Furthermore, solid central bank buying of gold and large net inflows into physically-backed gold Exchange Traded Funds (ETFs), have propelled the rise in gold prices.
Analysts expect periodic downward corrections in gold prices as investors take profits, with many foreseeing that gold can rise further in the months ahead, supported by “safe haven” buying due to geopolitical turmoil and economic uncertainties.
The Bank of America and Societe Generale have said gold can potentially reach USD $ 5,000 per ounce in 2026.
The pound edged up against the dollar in mid-October due to the expectations of two further U.S. rate cuts in the remainder of 2025.
Analysts were divided over whether the Bank of England would cut rates again in 2025, with several taking the view that stubborn inflation in the UK will reduce the likelihood of a further rate cut this year.
The Bank of England is cautious as inflation remains above its 2 percent target.
With the Bank of England hesitant to cut rates in the coming weeks, and two U.S. rate cuts later this year largely priced in by the market, several analysts see the pound remaining firm against the dollar for the rest of 2025.
A robust pound would ease the pain to UK-based savers looking to accumulate dollar-denominated gold at the present high prices.
