Gold reached an all-time high of $2,135.39 an ounce on Monday amid growing optimism that the US Federal Reserve will cut interest rates in 2023, weakening the dollar in recent weeks. Profit-taking later saw gold trade at $2,069.01 with the dollar firmer.
Analysts note gold is also benefitting from the ongoing Israel-Hamas conflict which has lasted two months. “Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fueled investor demand for safe-haven assets like gold,” said Victoria Scholar of Interactive Investor.
Elsewhere, bitcoin traded above $40,000 for the first time since May 2021, boosted by hopes the US will allow broader trading of the largest cryptocurrency. Expectations of Fed rate cuts have put downward pressure on the US dollar trading around three-month lows, adding to bitcoin and gold’s appeal as havens.