Gold Prices Reach a New Record Level

SadaNews - The price of gold recorded a new record level today, Tuesday, as investors ignored the cautious tone from Federal Reserve officials regarding the monetary policy path, following the U.S. central bank's decision last week to cut interest rates.

The precious metal rose in Asian trading to $3,749.27 per ounce, continuing its gains for the third consecutive day after reaching historical peaks in previous sessions. Gold-backed exchange-traded funds witnessed the fastest inflows in over three years last Friday, enhancing upward momentum after a temporary setback following remarks by Federal Reserve Chairman Jerome Powell, which subdued expectations for a rapid monetary easing cycle.

Record Inflows and Support from Silver

Analysts at "BMO Capital Markets" stated that the increasing inflows into funds "remain the driving force," noting that a rate-cutting cycle has become strongly on the table, raising the likelihood of price increases in the fourth quarter.

Powell is expected to deliver an important speech later today on economic forecasts, after the accompanying "dot plot" of the interest rate decision showed a wide range of opinions among policymakers. Several Federal Reserve officials confirmed yesterday, including St. Louis Fed President Alberto Musalem, the need for a cautious approach amid ongoing price pressures.

Meanwhile, silver continued its gains to settle near $44 per ounce, supported by heavy trading in options contracts for the "iShares Silver Trust," which saw its daily volume jump on Friday to 1.2 million contracts—the highest since April 2024.

A Preferred Haven Amid Tensions

Gold and silver are among the best-performing commodities this year, bolstered by a mix of U.S. interest rate cuts, increased purchases by central banks, and ongoing geopolitical tensions. Major banks, including Goldman Sachs, have predicted continued gains.

Chris Weston, head of research at "Pepperstone Group," stated that investment managers and traders "are offsetting their exposure to U.S. core stocks with long positions in gold," adding that "the yellow metal has become the preferred haven due to its weak correlation with other asset classes and everyone's perception of its clear upward trend."

As of 7:42 a.m. Singapore time, spot gold stabilized at $3,747.42 per ounce, while the Bloomberg Dollar Index remained stable. Silver held steady, while platinum and palladium rose.