Spot Gold extended gains to a new all-time high of $3,759.02/oz. on Tuesday on expectations the Federal Reserve will continue easing its monetary policy and ahead of a speech by Federal Reserve Chair Jerome Powell.
The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and indicated another 50 basis points of rate cuts by the end of the year.
Markets are now pricing in about a 90% chance of a 25 basis point Fed rate cut in October and a 75% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Powell is expected to speak at 16:35 GMT, with investors looking for further policy clues.
“I think it’s predominantly a factor of monetary policy expectations, potentially lower interest rates, and upside risks to inflation,” Capital.com analyst Kyle Rodda was quoted as saying by Reuters.
Spot Gold was last up 0.23% on the day to trade at $3,754.80 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 43.08%.
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