Gold hits all-time high on safe-haven demand, Fed rate cut bets

Gold hit a record high on Tuesday as there were no signs of a reprieve from an impasse between the two houses of the US Congress that has led to a government shutdown, while near-certain bets of a US rate cut this month also lent support.

Spot gold rose 0.4 percent to US$3,974.09 (HK$30,997.9) per ounce by 1246 Hong Kong time, trading near the all-time high of US$3,977.19 hit earlier in the session.

US gold futures briefly touched US$4,000 per ounce for the first time early Tuesday, bringing year-to-date gains to more than 50 percent.

Investment bank UBS said in a note that a softer greenback, robust central bank demand and rising exchange traded fund inflows are set to support bullion prices, forecasting gold to reach US$4,200 per ounce by mid-2026. Other major investment houses also expect further upside.

The rally in bullion has spilt over into gold-related equities. Shares at Zijin Gold International (2259), a wholly owned unit of China's Zijin Mining (2899), have more than doubled since its debut last week.

Zijin Gold International, which counts the Government of Singapore Investment among its 29 cornerstone investors, is set to join the Hang Seng Composite Index from October 16, potentially paving the way for inclusion in the Stock Connect program, opening access to mainland investors.

Zijin Mining, China's biggest gold and copper producer, retains an 86.7 percent stake in the unit, worth about HK$334.8 billion.

HSBC Global Investment Research said the spin-off has unlocked value for Zijin and reaffirmed its “Buy” rating, raising the target price to HK$37.7.

Following Zijin’s move, Shandong Gold Mining (1787) was said to be planning to list its Shenzhen-listed subsidiary, Shanjin International Gold, in Hong Kong, seeking to raise about US$700 million. Shanjin’s revenue rose to 13.6 billion yuan (HK$14.87 billion) last year from 8.1 billion yuan in 2023, with net profit climbing to 2.18 billion yuan.

REUTERS and STAFF REPORTER