Spot gold was up 0.9% at $4,178.15 per ounce, after hitting a record high of 4,186.68 earlier in the session

Gold rose to a new high just short of the $4,200-per-ounce level on Wednesday as renewed China-U.S. trade worries boosted safe-haven demand.

Spot gold was up 0.9% at $4,178.15 per ounce, as of 0448 GMT, after hitting a record high of 4,186.68 earlier in the session.

U.S. President Donald Trump said on Tuesday his administration planned to produce a list on Friday of “Democrat programmes” that will be closed as a result of the federal government shutdown.

The U.S. government shutdown and dovish comments from Jerome Powell have provided the latest reasons for gold prices to accelerate higher, said StoneX senior analyst Matt Simpson.

U.S. central bank Chair Jerome Powell said the U.S. labour market remained subdued, though the economy “may be on a somewhat firmer trajectory than expected.”

Powell said interest rate decisions would be made on a “meeting-by-meeting” basis, balancing labour market weakness with persistent inflation above target.

Investors are pricing in a near-certain chance of a 25-basis-point central bank rate cut in both October and December.

Bullion tends to do well in a low interest rate environment and during times of political and economic uncertainties.

Safe-haven gold has added 59% year-to-date, driven by multiple factors, including geopolitical and economic uncertainties, strong central bank buying, de-dollarisation trend and robust exchange-traded fund inflows.

This rally has also become a momentum trade, where traders pile in simply to chase prices getting away from them, Simpson said.

Trump said Washington was considering cutting some trade ties with China, including in cooking oil. Both countries began imposing tit-for-tat port fees on Tuesday.

The International Monetary Fund raised its 2025 global growth forecast, citing better-than-expected tariff and financial conditions, while cautioning that renewed China-U.S. trade tensions could curb growth.