The price of gold jumped by another 0.8%, reaching a new record high, as the aggressive easing of the Fed's monetary policy continues to fuel demand for the precious metal.
Since the beginning of the week, gold prices have increased by almost 1%, while in September the precious metal rose by 4.2%.
Earlier this week, the Fed cut the interest rate by 0.5%. The Fed also projected a further 0.5% reduction by year-end, a 1% next year, and an additional 0.5% in 2026. According to the CME FedWatch Tool, markets see a 57.1% probability of a 0.25% rate cut at the November meeting and a 50.1% probability of a 0.50% rate cut in December, with a 0.73% rate cut expected by the end of the year. Zero-yield bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.
Demand for gold has also increased amid escalating tensions in the Middle East. Israeli warplanes carried out massive strikes on southern Lebanon, which led to an escalation of the conflict between Israel and the Lebanese armed group Hezbollah.
Experts believe that in the coming months, the upward trend of gold will continue against the background of a weaker US dollar and lower US bond yields, as well as geopolitical tensions.