Gold at all-time high

Gold At All-Time High on Fed Policy Expectations and Global Tensions

Gold remained at an all-time high, influenced by expectations of a dovish stance from the Federal Reserve and increasing geopolitical tensions in the Middle East. Traders expect the Federal Reserve to implement a 25-basis-point rate cut in September, as opposed to a more aggressive 50-basis-point cut that was anticipated previously. Although changing expectations could weigh on gold in the short term, the expected direction in interest rates could continue to support gold’s performance. This outlook has contributed to a decline in US Treasury bond yields, which, in turn, could weaken the US Dollar, benefiting gold prices.

Traders could remain cautious ahead of more signs from the Federal Reserve and the release of  the latest FOMC minutes, which are expected to provide further insights into the Fed’s monetary policy.

Geopolitical instability, including the ongoing war in Ukraine and conflicts in the Middle East, along with tensions between the US and China, continues to drive demand for gold as a safe-haven asset. This demand is likely to sustain gold prices in the short to medium term.