(MENAFN) The price of gold per ounce reached a notable milestone on Wednesday, climbing above $4,200, fueled by mounting expectations of further reductions in US interest rates and growing worries over the trade relationship between the US and China.

Gold prices surged by 1.44% to hit $4,202 per ounce as of 0737 GMT, marking an impressive annual increase of approximately 60%.

Similarly, silver saw a significant boost, climbing 2.54% to $52.7 per ounce, following its record-breaking level last week when it topped $53.2.

In the context of ongoing discussions about a possible federal government shutdown in the US, Federal Reserve Chair Jerome Powell remarked that the American labor market remains somewhat weak, even though the overall economy "might be on a slightly stronger path than anticipated."

Powell emphasized that interest rate decisions would be made on a "meeting-by-meeting" basis, balancing the persistent labor market difficulties against inflation levels that still surpass target goals.

Market analysts largely expect the Federal Reserve to implement a nearly certain 25-basis-point rate reduction in both October and December.

On another front, US President Donald Trump revealed that the US is considering cutting certain trade ties with China, including those connected to cooking oil.

This development comes as both countries began enforcing reciprocal port fees starting Tuesday.

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