Gold Soars Near Historical Peak Supported by Interest Rate Cut Expectations and Geopolitical Concerns

Gold achieved new gains during trading on Thursday, approaching its highest levels ever, in a move attributed to several factors including expectations of a cut in U.S. interest rates and rising geopolitical concerns, prompting investors towards the precious metal as a safe haven.

Futures contracts for the yellow metal recorded a notable increase of 0.9% to reach $4237.5 per ounce, while the spot price rose by 0.2% to record $4216.0874 per ounce.

This rise coincides with a 0.1% decline in the dollar index, making gold priced in U.S. currency more attractive to holders of other currencies. The gains were also supported by increasing market expectations that the Federal Reserve will cut the interest rate by 25 basis points during its meeting this month, with another cut expected in December.

On the geopolitical front, increasing developments have fueled demand for gold, especially with the United States and China exchanging port tariffs on each other's ships this week, alongside U.S. officials criticizing the expanded controls imposed by China on the export of rare earth metals, describing them as a "threat to global supply chains," and threatening to respond.

Gold continues to shine as the leading safe-haven asset during periods of uncertainty, recording a 61% increase since the beginning of the current year, in an ideal environment combining lower yields on fixed-income instruments and rising global tensions, along with increased purchases of the precious metal by central banks.