gold price hits new record high above $2,100 | know why gold rates are up
Gold price today: Gold prices surged to a record high above $2,100 on Monday, driven by growing trader confidence that the Federal Reserve will cut interest rates next year. In early Asian trading, gold peaked at $2,135.39, surpassing its previous record set during the 2020 pandemic, AFP reported.
The recent escalation in the Israel-Hamas conflict has sparked a rush into gold, traditionally seen as a safe-haven investment. This surge has been further bolstered by a series of data indicating a possible slowdown in inflation, fueling speculation about a potential Fed rate cut.
This speculation has adversely affected the dollar, making gold more affordable for buyers using other currencies, AFP reported. Market sentiment shifted significantly after Federal Reserve Chairman Jerome Powell’s remarks on Friday, where he noted that interest rates are “well into restrictive territory.” These comments have heightened expectations that the Fed might soon commence rate reductions. The Federal Open Market Committee’s (FOMC) meeting, where the benchmark lending rates in the US are decided, is tentatively scheduled to be held from December 12-13 this year.
According to a Bloomberg report, traders now see a 60 percent likelihood of a rate cut as early as March, and a rate drop is fully expected by May. This anticipation has played a key role in the recent rally in gold prices.
In India, gold prices have also been reaching new peaks. Following the international spot gold’s closure at $2072 per ounce on Friday night, the yellow metal on the Multi Commodity Exchange (MCX) India marked an all-time high over the weekend, according to a report by Times of India. On the MCX, gold closed at a record high of Rs 63,380 on Friday. In the domestic markets, the price of 24K gold climbed to unprecedented levels, reaching Rs 65,350 per 10 grams, inclusive of taxesNews Related