Global Gold Prices Hit Highest Level in History Overshadowed by US Fed Interest Rates

JAKARTA – World gold prices surged to a new record, boosted by rising expectations that the US Federal Reserve ( the Fed ) or bank sentral America will announce a significant interest rate cut this weekend.

As reported by Yahoo Finance, the price of gold in the Spot market rose 0.4% to a historic high of USD2,589.02 per ounce. Meanwhile, the price of gold futures for December delivery reached USD2,613.70 per ounce.

Rising demand for safe-haven assets was fueled by reports of a second assassination attempt on Republican presidential nominee Donald Trump, although Trump was unharmed and the attacker was arrested.

A weaker US dollar added strength to gold prices as investors await the next Federal Reserve meeting, where the central bank is widely expected to cut interest rates. While markets are still divided over whether the Fed will cut rates by 25 or 50 basis points (bps), recent developments are leaning toward a larger cut.

A report by Federal Reserve expert Nick Timiraos in The Wall Street Journal, alongside comments from former New York Fed president William Dudley, sees the probability of a 50 basis point cut rising from 27% previously to 43%.

At the same time, market expectations for a 25 basis point cut fell to 57%. Expectations for the size of the cut, with concerns about a weak labor market fueling the case for more aggressive easing, data from the CME FedWatch tool showed.

“The prospect of the Fed potentially delivering a 50 basis point cut this week has sent gold and the dollar in opposite directions,” Tim Waterer, chief market strategist at KCM Trade, told Reuters.

“The overall conditions for gold remain favorable, with further upside likely. If the dollar continues its downtrend, gold could reach $2,700 by year-end.”