Gold prices hit a new record on Monday, rallying sharply amid rising geopolitical tensions and speculation that the Federal Reserve (The Fed) will cut interest rates further next year. Gold surged to $4,459.60 per ounce, registering a 2.4% gain on the day—its biggest gain in more than a month.

The surge in gold prices was driven by market expectations that the Fed will lower borrowing costs again in 2026, a policy that would benefit the precious metal. Gold, as a non-interest-bearing asset, often benefits in a lower interest rate environment.

Geopolitical tensions, particularly those in Venezuela, also exacerbated market concerns. The US tightened its blockade of Venezuelan oil tankers as part of its pressure on President Nicolás Maduro's government, increasing uncertainty and prompting investors to seek refuge in gold.

Early in the morning in Singapore, spot gold was trading 0.3% higher at $4,465.12 per ounce, remaining close to its previous record high. Meanwhile, silver also recorded a small increase of 0.3% to $69.21 per ounce, not far from its previous record price of $69.4549.

Furthermore, platinum and palladium prices also rose, following the movement of gold prices. All of this occurred amidst a weakening Bloomberg Dollar Index, which fell 0.4% in the previous session.

Investors are currently closely monitoring market movements ahead of the release of US economic data that could influence the Fed's decision. If the data supports the market's view that the US economy is slowing, the Fed is likely to continue its monetary easing policy, which benefits gold.

Overall, gold prices continue to show strong momentum, driven by a combination of rising geopolitical tensions, the Fed's dovish monetary policy, and demand for safe-haven assets. As uncertainty persists, gold is expected to remain a primary choice for investors. (asd)

Source: Bloomberg.com