Gold has topped $4,200. Here’s why Yardeni thinks the rally could go even higher.

Investing.com - The price of gold could climb to $10,000 per ounce by the end of the decade or sooner should there be an extension to a recent rally in the yellow metal, according to analysts at Yardeni Research.

On Wednesday, gold surged above $4,200/oz for the first time, as expectations of imminent U.S. interest rate cuts and renewed U.S.-China trade tensions added fuel to what has been strong safe-haven demand.

Spot gold was trading 1.3% higher at $4,197.04 per ounce at 06:09 ET (10:09 GMT), after notching an all-time high of $4,200.11 earlier in the session. U.S. December Gold Futures jumped 1.2% to $4,213.54/oz.

Bullion has gained for the last eight consecutive weeks, and was on pace for yet another weekly increase. Gold is now tipped by the Yardeni analysts to reach $5,000/oz next year.

The precious metal’s latest uptick gathered pace after Federal Reserve Chair Jerome Powell delivered remarks on Tuesday that investors interpreted as dovish.

Powell said the U.S. economy may be on a firmer trajectory than some expected, but cautioned that a notably softer labor market is emerging. He added that there was “no risk-free path” for policy and emphasized that future decisions would be made “meeting by meeting.”

His comments reinforced market expectations for potential Fed rate cuts in both October and December, sending U.S. Treasury yields lower and weakening the dollar -- both supportive for non-yielding bullion.

Adding to the bullish momentum were fresh trade tensions between the U.S. and China. President Donald Trump floated the idea of ending certain trade ties with China, specifically targeting cooking oil imports, in response to Beijing’s pullback on U.S. soybean purchases.

The two countries also imposed reciprocal port fees on ocean shipping firms this week, deepening their tariff standoff.

"Investors seeking protection from mounting geopolitical risks have been heading for the hills to mine for gold," the Yardeni strategists said in a note.

They added that the uncertainty has especially burnished gold’s appeal against perceived riskier assets such as Bitcoin, the world’s largest cryptocurrency.

"Risk-off investors may increasingly be concluding that gold is a better protection for geopolitical risks than is Bitcoin. The former has been around since the beginning of history and widely viewed as a hedge against risk, while the latter has a short history and has behaved mostly as a risk-on speculative vehicle," they wrote.