Gold strikes fresh record high as rate cut bets surge

Hong Kong, Dec 04, 2023 -Gold prices soared to a record high above $2,100 on Monday as traders grow increasingly confident the Federal Reserve will cut interest rates in the new year.

The precious metal struck $2,135.39 in early Asian trade, topping the previous all-time high set in 2020, during the pandemic.

Traders have flocked into bullion in recent weeks on safe-haven buying as the Israel-Hamas war started.

It has been given extra strength as a string of data points to a slowdown in inflation that has led to speculation the Fed can slash rates.

Bets on a drop in rates have weighed on the dollar, which has in turn made gold cheaper for international buyers.

Traders began shifting into the metal after Fed boss Jerome Powell said Friday that rates are "well into restrictive territory", fanning hopes the bank could begin cutting soon.

Bloomberg reported that traders saw a 60 percent chance of such a move in March, while they have fully priced one in May.