Gold keeps its rally going, marking new highs in Asian trade on Wednesday, fuelled by the expectation of even lower U.S. interest rates. Additionally, heightened tensions in the Middle East, with Israel ramping up military efforts against Hamas and Hezbollah, have kept demand for the yellow metal.
Spot gold (XAU/USD) reached $2,670.52 an ounce, easing slightly to $2,656.32 by 10:45 GMT. Traders continue to bet on further rate cuts after last week’s 50 basis point reduction, viewing the lower opportunity cost as a reason to favour gold over yield-bearing assets.
More clarity is expected this week, with Federal Reserve Chair Jerome Powell set to speak Thursday. Key inflation data, including the Fed’s preferred PCE price index, will also help shape market expectations.
While analysts project a 125 basis points reduction in total, the pressure on the dollar has worked in gold’s favour.
Subscribe to Investomania for more gold news and updates.
