Gold Hits Record High Amid West Asia Tensions, More Rate Cuts Hopes
TLDR
- Gold price hits record high at $2,654.96 per ounce due to tensions in West Asia and potential U.S. rate cuts.
- Spot gold reaches $2,651.87 and U.S. gold futures climb to $2,677.00 amid fears of increased conflict in the region.
- Gold's surge in 2024, up 28%, driven by safe-haven appeal, investor reactions to Iran tensions, and Fed rate cuts boosting the precious metal.
Gold surged by 1% on Tuesday, reaching a record high of $2,654.96 per ounce, driven by escalating tensions in West Asia and growing expectations of further U.S. interest rate cuts.
Spot gold was up 0.9% at $2,651.87 by 16:43 GMT, while U.S. gold futures rose 0.9% to $2,677.00. Gold has gained 28% in 2024 as fears of broader conflict in the region intensified. The rally is primarily fueled by gold’s safe-haven appeal, with investors reacting to potential escalations involving Iran.
The Federal Reserve's recent 50 basis point rate cut has also boosted gold, as lower rates reduce the opportunity cost of holding the non-yielding asset. Fed officials indicated the likelihood of more cuts, adding momentum to gold's rise.
Key Takeaways
Gold’s rise to record highs is driven by both geopolitical tensions and monetary easing, with investors seeking safety amid uncertainty. Expectations of further rate cuts, alongside renewed inflows into gold-focused exchange-traded funds (ETFs), could push prices higher, with major banks predicting the rally will extend into 2025. Analysts see gold exceeding $2,700 if tensions increase further. Silver, platinum, and palladium also saw gains, with silver up 4.8% to $32.14, platinum up 3.1% to $985.95, and palladium up 1.6% to $1,057.93.
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