Gold Price News: Gold Hits All-Time High

Gold prices surged to an all-time high on Tuesday, on a combination of speculation over upcoming interest rate cuts, bullish fundamentals and haven appeal amid ongoing geopolitical tensions.

Prices briefly touched $2,142 an ounce on Tuesday – the highest-ever price – before easing back slightly to $2,134 an ounce by late afternoon.

Positive momentum in the gold market has been building after news that central banks, particularly those in China and India, have been increasing their stocks of gold in recent months. Some analysts have been pointing to expected price increases in 2024 on the back of these central bank purchases, but also due to strong retail demand in emerging markets, coupled with safe-haven flows linked to current geopolitical tensions.

This bullish backdrop for gold has been further strengthened by rising bets on the US Fed starting to cut interest rates as soon as June – a supportive factor for non-interest-bearing assets like precious metals.

Serving to highlight the possibility of upcoming rate cuts, US ISM Services PMI figures for February came out on Tuesday showing a slightly larger drop than market expectations, while factory orders for January also fell 3.6%, well below expectations of a 2.9% drop. The latest figures suggest growing pressure on the US Fed to slash rates in the next few months.

Data from interest rate traders implies a roughly 55-60% probability that the US Fed will cut rates by 25 basis points at its upcoming June 12 meeting. Earlier in the year, the markets had favoured the first cut happening as soon as May.