Gold surges to new record high amid rate cut bets
Gold prices have soared to an all-time high, surpassing $3,600 per ounce, driven by growing expectations that the Federal Reserve could implement rate cuts totaling 75 basis points by the end of the year.
A weakening U.S. dollar has further bolstered the rally, News.Az reports, citing foreign media.
Gold continues breaking records as its safe-haven feature comes to the fore amid uncertainties, geopolitical risks, and estimates of rate cuts, while the US debt reaches over $37 trillion.
The ounce price of gold is trading at $3,651.96 on Tuesday, up 0.5%. Gold increased by around 5% in a week.
More and more investors opt for gold in anticipation of falling interest rates. Gold rose 9% last month and more than 38% this year, versus 27% last year.
Meanwhile, silver is on a record spree in line with gold -- silver exceeded $40 per ounce for the first time since 2011, reaching $41.36, up 40% since the beginning of the year, overperforming gold.
Some investors view gold as more of a safe haven than US bonds, contributing to its rise, alongside the Fed’s likelihood to cut rates this month.
As labor data in the US showed a cooling labor market, money market estimates point to three rate cuts this year, each in September, October, and December, totaling 75 basis points.
The interest on the US economy’s debt of $37 trillion exceeds the country’s military spending, further prompting investors to look to safe-haven assets.
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