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Gold Hits Record High as Investors Bet on Fed Rate Cuts
9 Sep
Summary
- Gold reaches new all-time high of over $3,647 per ounce
- Surge in bets for multiple Fed rate cuts this year boosts gold's appeal
- Central bank purchases, geopolitical tensions, and global economic concerns support gold's rally
In the latest development, gold has reached a new record high, with its rally stoked by a surge in bets for a wave of Federal Reserve rate cuts this year. The precious metal gained as much as 0.3% to a fresh all-time high of more than $3,647 an ounce, beating the previous peak on Monday. This climb comes after unexpectedly weak US payrolls data on Friday prompted traders to price in three rate cuts this year, including a quarter-point cut at the Fed's meeting next week.
Gold tends to benefit from lower borrowing costs as it doesn't pay interest, and the recent rate-cut speculation has further boosted the metal's appeal. However, the continued rally could hinge on a benchmark revision of US jobs data due later on Tuesday, along with the tone of US producer and consumer inflation figures in the coming days. Market reaction to the auctions of short- and long-term Treasuries will also be closely watched.
Gold has climbed nearly 40% this year, driven by a combination of factors, including central bank purchases, rate-cut speculation, and stronger haven demand due to heightened geopolitical tensions and concerns about the impact of President Donald Trump's tariff regime on the global economy. Analysts and investors widely expect more gains for the precious metal, with some predicting it could rally to nearly $5,000 an ounce if investors shift a portion of their holdings from Treasuries into bullion.
