Gold hits new high as world prepares for US rates cut

THE price of gold hit a new record today, with investors across global markets preparing for the landmark moment when US interest rates could be cut for the first time since Covid.

Recent remarks from the chairman of the Federal Reserve, Jerome Powell, that the base cost of borrowing in the world’s biggest economy were in “restrictive territory” helped the trend. They were interpreted as a sign that the start of the next run of cuts could come early in 2024.

When interest rates fall, the yield on offer from assets linked to them also drops. This boosts the appeal of alternatives, including gold, while the drop in the dollar, in which gold is priced, adds to the trend.

Gold’s record — at $2,148.78 an ounce — came during Asian trading hours. Bitcoin also rose, trading above $40,000 for the first time since 2022.

Joshua Mahony at Scope Markets said: “Gold bulls are unlikely to be deterred from the notion that we could be heading into a great year for precious metals. Market optimism around the timing of the start of monetary easing in 2024 has helped.”