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Gold rose to an all-time high on Thursday as the US Federal Reserve hinted at two possible interest rate cuts this year, bolstering bullion’s appeal amid ongoing geopolitical and economic tensions.
Spot gold was little changed at $3,048.37 an ounce as of 0350 GMT, after hitting an all-time high of $3,055.96 earlier in the session.
US gold futures gained 0.5 per cent to $3,056.50.
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Gold is driven by “a lot of uncertain market situations, geopolitical tensions, weaker US dollar, and expectations that interest rates will be cut later,” said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.
The Fed held its benchmark overnight rate steady in the 4.25-4.50 per cent range on Wednesday. Policymakers expect the central bank to deliver two quarter-percentage-point rate cuts by the end of 2025.
Non-yielding gold thrives in a low interest rate environment.
US President Donald Trump’s initial policies, including extensive import tariffs, appear to have tilted the US economy towards slower growth and at least temporarily higher inflation, Fed Chair Jerome Powell said.
Trump’s tariffs, which have flared trade tensions, are widely thought to be inflationary and detrimental to economic growth.
The tariff uncertainty, rate cut possibilities, and resumption of tensions in the Middle East have contributed to gold’s rally, prompting bullion to notch 16 record highs so far in 2025, four of them above the $3,000 milestone.
“For now, gold’s appeal as a safe haven and inflation hedge has further strengthened in light of those geopolitical concerns and tariff uncertainty. We remain constructive on the outlook of gold,” said OCBC FX strategist Christopher Wong.
“Given the very good performance in gold through Q1, I think a correction is not out of the question,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
“However, so far corrections have been relatively short-lived and well bid…$3,090-$3,100 may see some resistance.”
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