Gold prices rose by 0.6%, continuing yesterday's rally and reaching a new record high, which was facilitated by the negative dynamics of the US currency and the increased likelihood of easing the Fed's monetary policy in September.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.28% to 103.97 (the lowest value since April 9).
The precious metal is also supported by expectations that the Fed will soon move to a rate cut. According to the CME FedWatch Tool, markets see a 6.7% probability of a 25 basis point rate cut at the Fed meeting in July, a 100% probability of a rate cut in September, and a 100% probability of monetary policy easing in November. The allure of non-yielding bullion rises when interest rates fall.
Meanwhile, experts said that safe-haven buying of gold could ramp up again due to the U.S. elections and global geopolitical risks. In addition, sources indicated that China, the largest consumer of gold, is still showing great interest in official purchases of the precious metal, despite the suspension of purchases in May and June.