Gold Hits New Record Level at $4,380 Amid Interest Rate Cut Expectations and Geopolitical Tensions

New York | EcoPulse24

Gold prices recorded a historic jump during trading on Monday, reaching a record level of $4,380 per ounce, fueled by increasing bets on further cuts to U.S. interest rates, alongside rising geopolitical risks that enhanced demand for safe-haven assets.

This increase came as markets priced in the possibility of two additional rate cuts by the U.S. Federal Reserve in the coming year, following weaker-than-expected inflation data released last week, which boosted the appeal of gold as a non-yielding asset that benefits from a low-interest-rate environment.

On the geopolitical front, prices received additional support from escalating tensions in several regions, as the U.S. monitors naval movements near Venezuela after the seizure of two oil tankers earlier this month, while the Mediterranean witnessed the targeting of a Russian oil tanker, marking an unprecedented development in the ongoing conflict between Russia and Ukraine.

According to market data, gold has risen by more than 60% since the beginning of the year, on track to record its best annual performance since 1979, reflecting a clear shift in the global risk landscape and increased demand for hedging assets.

Strong purchases by central banks and continued inflows into gold-backed exchange-traded funds (ETFs) have also contributed to the upward momentum, providing structural support for prices alongside monetary and political factors.

This record performance reflects the prevailing anxiety in global markets, with increasing uncertainty regarding the trajectory of the global economy and monetary policies, reinforcing gold's position as one of the leading hedging tools in the current phase.