(Bloomberg) -- Gold rose to a record as heightened US-China frictions and bets the Federal Reserve will press on with monetary easing through the end of the year supported demand.

Bullion has risen more than 5% so far this week and touched a peak above $4,242 an ounce on Thursday, as a breakneck rally underway since mid-August extended. The buying spree has spread to other precious metals, with silver surging more than 3% on Wednesday as availability in the London market remained tight.

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Traders are piling into wagers calling for at least one outsized US rate cut by year—end, while Fed Chair Jerome Powell signaled this week the central bank is on track to deliver another quarter-point reduction later this month. Lower borrowing costs tend to benefit precious metals, as they don’t pay interest.

President Donald Trump declared the US was now locked in a trade war with China, spurring fears of prolonged damage to the global economy that could boost gold’s haven appeal, even as Treasury Secretary Scott Bessent proposed a longer pause before raising tariffs further.

The ongoing US government shutdown has also aided bullion, as has the so-called debasement trade, where investors pull away from sovereign debt and currencies to protect themselves from runaway budget deficits. Enthusiastic central-bank buying has been another key pillar, underpinning a surge of more than 60% in gold so far this year.

Gold’s “extraordinary rally” is showing no sign of slowing, supported by expected rate cuts, ANZ Group Holdings Ltd. analysts Soni Kumari and Daniel Hynes wrote in a note. They raised their price forecast for year-end to $4,400 an ounce, with a peak near $4,600 seen by June 2026.

“Mounting concerns around the Fed’s independence, political uncertainty, trade tariffs, geopolitical tensions, and ballooning debts will continue to keep strategic investment interest strong for gold,” they said. “Investors are willing to pay higher premium to diversify their portfolio risk, with gold remaining both a risk diversifier and strategic asset.”

Spot gold was 0.6% higher at $4,232.98 an ounce at 12 p.m. in Singapore. Silver was little changed. The Bloomberg Dollar Spot Index dipped 0.1%, falling for a third day. Palladium gained, while platinum was flat.

The silver market, meanwhile, has been gripped by a lack of liquidity in London, sparking a worldwide hunt for the metal and driving benchmark prices to soar above futures in New York. Prices touched a record above $53 an ounce this week and were steady on Thursday.

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