XAU/USD: Gold Blasts Off to New Record at $2,530 amid Strong Optimism Over Rate Cuts

Mosaic of events has propelled yellow metal to its new record high — geopolitical tensions and central bank expectations are front and center.

• Gold prices (​​XAU/USD) extended their upside swing to a fresh record high. The never-before-seen level of $2,530 per ounce is how far bulls managed to charge on Tuesday before the precious commodity pared some of its gains and settled near $2,515 early Wednesday. The new leg up gave a single gold bar a price tag of more than $1 million. A standard gold bar, such as those held by central banks, weighs about 400 ounces, or 25 pounds, or 11 kilograms.
• Sweeping optimism that the US Federal Reserve will cut interest rates for the first time since 2020 is propelling gold higher. The Fed’s September meeting is when markets expect to get a trim to borrowing costs in the ballpark between 25bps to the jumbo-sized 50bps. But before that, central bankers are headed to Jackson Hole for a three-day retreat where Jay Powell will move markets once again with a speech on Friday.
• Geopolitical tremors are also triggering a run to gold, which is considered a safe-haven asset. Traders seek it out in times of heightened risks to the global economy, trade and politics. With the Middle East crisis showing no signs of ceasefire, despite continuous efforts from the US and other countries, investors prefer to allocate a fair amount of their cash to gold just in case things escalate or spill over to adjacent regions.