Gold Surges to Record Highs Amid Expectations of U.S. Interest Rate Cuts and Global Tensions

Gold prices have surged to record highs, exceeding $2,300 per ounce, driven by expectations of U.S. interest rate reductions and geopolitical tensions. Federal Reserve discussions, especially those led by Chair Jerome Powell, have fueled market anticipation of rate cuts, with a 59% probability of a cut in June according to the CME FedWatch tool.

Lower interest rates typically favor gold as they reduce the opportunity cost of holding non-interest-bearing assets. Strong demand from Asia, particularly China, and central bank purchases have further supported the rally.

The upcoming U.S. non-farm payrolls report for March is expected to offer insights into the timing of the Fed's potential rate cut. While historical trends indicate gold strengthens during rate cut periods, concerns about a potential market pullback persist.