Gold extended gains to scale a record high on Monday, driven by the momentum generated by the Federal Reserve's interest rate cut and safe-haven demand due to geopolitical risks in the Middle East, reports Reuters.
Spot gold was up 0.2 per cent to $2,628.25 per ounce as of 0524 GMT, after hitting a record high of $2,630.93 earlier in the session. Non-yielding gold is up over 27 per cent so far this year, heading for its biggest annual rise since 2010.
US gold futures gained 0.3 per cent to $2,653.00.
"The current state of play in the global economy, which consists of declining interest rates, seemingly ever-present geopolitical risks and an upcoming US election has suited gold to a tee," said Tim Waterer, chief market analyst at KCM Trade.
"If the Fed stays committed to its rate-cutting cycle in the coming months, then any pullback in gold will likely have buyers waiting in the wings, with investors potentially eyeing off some better entry points."
The Fed began its easing cycle last week with a half-percentage point rate cut, and forecast another half-point cut by year-end and a full point next year.
Fed futures traders have priced in 75 basis points in rate cuts by the end of this year, according to CME FedWatch.
Lower rates reduce the opportunity cost of holding bullion, which is also viewed as a safe asset amid economic and political turmoil.
Among other metals, spot silver edged 0.2 per cent lower to $31.05 per ounce, platinum fell 0.4 per cent to $971.05 and palladium shed over 1 per cent to $1,056.55.
© 2024 - All Rights with The Financial Express
