Gold Price News: Gold Notches Up Another All-Time High

Gold prices climbed further on Thursday to set new highs amid a continuing bullish mood as the markets looked ahead to further interest rate cuts following the US Fed’s first cut last week.

Prices rose as high as $2,686 an ounce on Thursday, a new all-time high, compared with around $2,660 an ounce in late trades on Wednesday.

The bullish mood in the gold market continued, following the US Fed’s 50 basis-point interest rate cut on September 18. The latest data from interest rate traders indicates a roughly 50-50 split between a 25-basis point and a 50-basis point cut at the US Fed’s next meeting on November 7. The prospect of further cuts in the cost of borrowing is supportive for gold as it tends to weaken the dollar as well as boost the appeal of non-yielding gold.

US GDP growth figures for Q2 came out at 3% on Thursday, in line with market expectations, while US durable goods orders were little changed in August, compared with market expectations of a 2.6% drop. Nevertheless, these figures did little to curb the market’s enthusiasm for gold this week.

Gold’s status as a safe haven has also meant the yellow metal has taken support from ongoing conflict in the Middle East. Israel’s government has said it will fight Lebanese militant group Hezbollah ‘with full force’ and appears to be dismissing international calls for a ceasefire.

There are now concerns that Israel’s air strikes could pave the way for ground operations into Lebanon. This is significant because of the risk that the hostilities could escalate into a wider conflict that could disrupt global trade flows and affect economic growth, prompting investors to divert capital into safe havens like precious metals.