Gold prices rose to a new record high on Tuesday (September 23), driven by safe-haven inflows amid geopolitical uncertainty and expectations of further Fed interest rate cuts.

Spot gold prices rose 0.8% to $3,777.80 an ounce at 1:45 p.m. ET (17:45 GMT), after hitting a new record high of $3,790.82 earlier in the session. U.S. gold futures for December delivery closed 1.1% higher at $3,815.7. The benchmark 10-year Treasury yield fell 0.2%, while the U.S. dollar was largely stable.

Fed Chairman Jerome Powell said the central bank faces a "challenging situation" with risks of faster-than-expected inflation, while weak job growth raises concerns about the health of the labor market. He offered no clarity on when the Fed might cut interest rates next.

"The gold market realized that there was nothing significant in his speech compared to the tone set last week, nothing significant enough to change the direction of gold's rally," said RJO Futures market strategist Bob Haberkorn.

Traders are still expecting US interest rate cuts in October and December after the Fed cut rates by 25 basis points earlier this month. Attention now turns to Friday's release of the US Personal Consumption Expenditures (PCE) index, the Fed's preferred measure of inflation.

Meanwhile, NATO warned Russia that it would use "all necessary military and non-military means" to defend itself, while condemning Moscow for violating Estonian airspace in an "increasingly irresponsible pattern of behavior."

Strong buying interest from ETF investors—driven by expectations of a rate cut, concerns about the Fed's independence, and geopolitical developments—is also likely to boost gold prices, Commerzbank said in a note. The People's Bank of China is using the Shanghai Gold Exchange to encourage central banks from friendly countries to buy and store bullion domestically, Bloomberg reported on Tuesday, citing sources familiar with the matter.

Spot silver rose 0.2% to $44.17 an ounce, nearing a 14-year high. Meanwhile, platinum rose 4.5% to $1,480.97, its highest level since 2014, and palladium rose 2.8% to $1,212. (alg)

Source: Reuters