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Gold extends record rally above $4,300, eyes best weekly gain since 2008

ReutersOct 17, 2025 2:22 AM

Oct 17 (Reuters) - Gold extended its record-breaking rally on Friday, climbing above $4,300, poised for their best weekly performance in 17 years, as escalating U.S.-China trade tensions fuelled market uncertainty, with U.S. rate cut hopes adding to the momentum.

FUNDAMENTALS

Spot gold XAU= rose 0.9% to $4,364.79 per ounce, as of 0040 GMT, after reaching a record high of $4,378.69. Bullion was up 8.7% for the week so far, marking its best weekly performance since September 2008.

U.S. gold futures GCcv1 for December delivery gained 1.6% to $4,373.20.

Spot silver XAG= climbed 0.5% to $53.97 per ounce, after reaching a record high of $54.35 earlier, tracking gold's rally and a short squeeze in the spot market, and remained on track for weekly gains.

The U.S. dollar index .DXY fell to over one week low, making greenback-priced bullion less expensive. USD/

Non-yielding bullion has gained over 65% year-to-date, driven by geopolitical tensions, aggressive rate-cut bets, central bank buying, de-dollarisation and robust ETF inflows.

Market sentiment was further influenced by U.S.-China trade tensions as China accused the U.S. of causing panic over its rare earth controls, while rejecting calls to reverse export curbs.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.18% to 1,034.62 tonnes on Thursday from Wednesday, hitting highest level since June 2022.

U.S. President Donald Trump and Russian President Vladimir Putin agreed on Thursday to another summit on the war in Ukraine.

Western nations continued to pressure Russia over its oil sales, with Britain imposing sanctions on major Russian oil firms.

The U.S. budget deficit shrank by $41 billion to $1.775 trillion in the 2025 fiscal year, the Treasury Department said on Thursday.

Elsewhere, platinum XPT= gained 0.4% to $1,719.55 and palladium XPD= was up 0.6% at $1,622.67. Both these metals were headed for weekly gain.



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