XAU/USD: Gold Soars to Record Above $2,480 on Rate Cut Hopes, Ray Dalio Comments

Precious metal prices extend winning streak with gold bugs excited about upcoming interest rate cuts by the Federal Reserve.

• Gold XAUUSD is on a tear. The precious metal hit an all-time record of $2,480 per ounce during the Asian session Wednesday as traders were feeling confident to pile their long bets. Optimism over the Federal Reserve’s interest rate cuts is back after a slew of favorable economic data and the man himself striking an upbeat tone on inflation — Jay Powell said Monday that the Fed is happy with the inflation’s downward trajectory.
• All this quickly brought back the conviction that the Fed would lower borrowing costs in September, from an earlier expectation of December. Gold is fashionable again because of its safe-haven allure but also because it tends to do well in a low-interest-rate environment. The new record high for gold comes a couple months after it crossed $2,440 per ounce but then pulled back by about 6.5% to $2,290 per ounce.
• Against this backdrop, a well-known gold bug spoke out on Tuesday, highlighting the bullion’s investment appeal. Ray Dalio, founder of the world’s largest hedge fund Bridgewater, told CNBC that every investor should hold gold as an “under-owned, relatively attractive asset.” “Gold is an effective diversifier, meaning that if you take the classic mix of assets, and you have a particular problem, an optimal portfolio would have something more than about 10% in it.”