Gold jumped to a new high on Tuesday, surpassing $2,100 per ounce amid heightened demand for safe-haven assets.
The rally was also fuelled by rising speculation over a possible US interest rate cut in June.
Spot gold surged by 0.5 per cent to $2,138.20 per ounce as of 12.30pm New York time (8.50pm UAE time) after scaling a peak of $2,141.50 earlier.
Spot is the price of gold as traded at a particular time, which must be sold instantly rather than in the future.
US gold futures grew by 0.6 per cent to $2,140.
The previous record for gold was set in December last year when it reached $2,135.40 per ounce.
Gold is one of the world’s oldest stores of value and serves as a leading safe-haven asset class globally. It has increased nearly $300 since the start of the Israel-Gaza war.
“The big reason here is that we are seeing the market increasingly believing that a Fed rate cut is nearer rather than further away,” Reuters quoted Bart Melek, head of commodity strategies at TD Securities, as saying.
“Markets have to be a little bit more convinced for gold to move higher, but ultimately in the second quarter, we do think it can go to over $2,300 plus.”
Federal Reserve Chairman Jerome Powell initiated the new communications strategy last month when he ruled out a March rate cut after the US central bank held rates steady between 5.25 per cent and 5.50 per cent.
In an interview, he said dialling them back too soon could lead to “inflation settling out somewhere well above” the Fed's long-term 2 per cent goal.
Mr Powell will appear before Congress on Wednesday and Thursday, and his testimony will be closely monitored for additional insights into the trajectory of the US interest rates.
Spot silver gained 0.08 per cent to $24.02 per ounce while platinum had dropped 1.78 per cent to $900.20 per ounce as of 12.30pm New York time.
