Gold Finally Rejoins Silver at New Record Price on Fed-Led Liquidity

Gold hit a fresh London record fixing near $4,343/oz and silver notched a fifth straight daily record, fixing above $64/oz and gaining 10.9% on the week, moves market participants attribute to an expected surge in global liquidity after the US Fed rate cut. Strategists say the rally reflects highly accommodative policy—rate cuts, the end of QT, accelerating M2 and deregulation—prompting demand for inflation protection, while others warn retail, margin-driven flows are contributing to stretched physical markets, full vaults and refiner backlogs. Base metals have followed suit, with LME and CME copper at record levels (~$11,800–$12,000/tonne) and physical draws into US warehouses, and gold export flows helped narrow the US trade deficit in September after a presidential assurance there would be no gold tariffs.

Analysis

Gold hit a fresh London record fixing around $4,343 per ounce at the 3pm bullion auction and rose roughly $100 from last Friday's benchmark before easing toward $4,300; silver fixed above $64/oz at midday and recorded a 10.9% weekly gain, its largest since August 2020, while briefly logging a fifth consecutive daily record. Market participants attribute these moves directly to anticipated expansion in global liquidity following the US Fed rate cut and the launch of Treasury purchases described in the article as 'not QE QE'.

Strategists cited by the piece — notably StoneX's Vincent Deluard — point to a confluence of accommodative factors (rate cuts, the end of QT, accelerating M2, deregulation and rebounding inflation) that should further ease financial conditions and increase demand for inflation protection. Offsetting risks are prominent retail, margin-driven flows: MKS Pamp's Nicky Shiels warns of filling vaults and refiner backlogs, implying inventory and processing bottlenecks that can amplify short-term volatility and crowding.

Base metals followed suit with LME 3-month copper near $11,800/tonne and CME futures above $12,000/tonne, and BNP Paribas notes physical draws into US warehouses creating a perception of ex-US tightness. Risk assets were mixed: the MSCI World pulled back from a record, Oracle shares fell about 12.5% this week after a slight earnings miss, Nvidia was flat for the week but remains +31% YTD after export restrictions were eased, and US trade data showed a narrower deficit in September driven by higher gold exports after a presidential no-tariff statement.

Key Decisions for Investors

• Increase selective exposure to physical precious metals or inflation-linked instruments as a hedge against liquidity-driven inflation, but scale positions and enforce risk limits given elevated short-term volatility from margin-driven retail flows
• Monitor physical-market signals (vault inventories, refiner backlogs, LME/CME warehouse movements) and central-bank communications (Fed rate guidance, QT stance, M2 prints) to time entries or hedges, preferring option structures (calls or collars) over leveraged outright longs
• Reassess equity positions for idiosyncratic and commodity sensitivity: trim conviction in names vulnerable to earnings misses or volatility (example: recent ORCL weakness), and maintain measured, size-controlled exposure to beneficiaries of eased export frictions (example: NVDA) while watching policy and supply indicators