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Gold price (XAU/USD) extends its upside to near $4,165 during the early Asian session on Wednesday. The precious metal edges higher as traders flock to safe-haven assets amid trade tensions and expectations of a US rate cut. Federal Reserve (Fed) officials are set to speak later on Wednesday, including Stephen Miran, Christopher Waller and Jeff Schmid.  

Renewed trade tensions between the United States (US) and China reignite safe-haven demand. US Trade Representative Jamieson Greer said on Tuesday that the US President Donald Trump could slap China with 100% tariffs on November 1 or sooner, depending on Beijing’s next action in a dispute over rare earths. 

The US and China will begin charging additional port fees on ocean shipping companies on Tuesday, affecting everything from holiday toys to crude oil, turning the high seas into a critical battlefield in the world's two largest economies' trade war. The US is scheduled to start collecting fees on October 14.

The yellow metal also receives support from growing expectations of Fed rate cuts. Fed Chair Jerome Powell said that the Fed is on track to deliver another quarter-point interest-rate cut later in the October policy meeting, even as a government shutdown significantly reduces its read on the economy.  

Markets are currently pricing in an almost certain 25 basis points (bps) rate cut at the Fed’s October meeting, with another reduction expected in December, according to the CME FedWatch tool. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Gold traders will keep an eye on the Fedspeak later on Wednesday for some hints about the US interest rate path. Any surprise hawkish remarks from Fed officials could lift the US Dollar (USD) and undermine the USD-denominated commodity price in the near term. 

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