Gold hit an all-time high on Thursday as the U.S. Federal Reserve hinted at two possible interest rate cuts this year, adding to bullion's appeal amid ongoing geopolitical and economic tensions.

Spot gold was steady at $3,047.1 an ounce by 0700 GMT, after hitting a record high of $3,057.21 earlier in the session.

U.S. gold futures rose 0.4% to $3,054.10.

Gold is being driven by "a lot of market uncertainty, geopolitical tensions, a weaker U.S. dollar and expectations that interest rates will be cut later," said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.

On Wednesday, the Fed left its benchmark interest rate unchanged in a range of 4.25%-4.50%, as widely expected. Policymakers anticipate two quarter-percentage-point cuts by the end of 2025.

Non-yielding bullion thrives in a low-interest-rate environment.

President Donald Trump's early policies, including tariffs, appear to have steered the U.S. economy toward slower growth and higher inflation, at least temporarily, Fed Chair Jerome Powell said.

Trump's tariffs have stoked trade tensions and are widely viewed as inflationary and detrimental to economic growth.

Tariff uncertainty, the possibility of rate cuts and rising tensions in the Middle East have contributed to gold's rally, pushing it to 16 record highs so far in 2025, with four of them above the $3,000 milestone.

On Thursday, 37 Palestinians were killed in an Israeli airstrike on Gaza, after Israel resumed its bombing campaign. "For now, gold's appeal as a safe haven and inflation hedge is further strengthened given geopolitical concerns and tariff uncertainty. We remain constructive on gold's outlook," said OCBC FX strategist Christopher Wong. Geopolitical and economic uncertainties underscore gold's role as a store of value. "Given gold's excellent performance through Q1, I don't think a correction is out of the question," said Nicholas Frappell, global head of institutional markets at ABC Refinery. "So far, corrections have been relatively short and well-received... $3,090-$3,100 may face some resistance." Spot silver was flat at $33.8 an ounce, platinum fell 0.3% to $989.85. Palladium fell 1% to $949.50. (Newsmaker23)

Source: Reuters