Gold prices hit record high amid rate cut expectations

Gold prices hit record highs on Monday, pushing past $2,100 an ounce amid expectations of rate cuts.

The yellow metal reached as high as $2,135 per ounce in Asian trading, before easing back.

Tickmill Group said the spike in gold can be attributed to the stark shift in central bank expectations. "The Fed and the ECB are now both seen cutting rates early next year," it said.

"In the US, a sharp drop in both CPI and employment indicators last month has seen traders stripping back their tightening forecasts and instead pegging rate cuts across H1."

Victoria Scholar, head of investment at Interactive Investor, said: "So far this year, the precious metal is up around 13.5% and has gained around 5% in the past month. Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fuelled investor demand for safe-haven assets like gold.

"Plus, expectations for Fed rate cuts next year have put downward pressure on the US dollar which is trading around three-month lows, adding to gold’s attractiveness. A recent survey from the World Gold Council found that 24% of all central banks plan to up their gold reserves in the next year, which could fuel further upside for gold in 2024."