Gold hit a record high Monday as growing optimism that the Federal Reserve will cut US interest rates in the new year has dented the dollar in recent weeks.
The precious metal, seen as a haven investment, reached an all-time pinnacle at $2,135.39 an ounce.
Profit-taking later set in, leaving it to trade at $2,069.01. The dollar was also firmer Monday.
Gold is benefitting also from the Israel-Hamas war according to analysts.
“Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fuelled investor demand for safe-haven assets like gold,” said Victoria Scholar, head of investment at Interactive Investor.
“Plus, expectations for Fed rate cuts next year have put downward pressure on the US dollar which is trading around three-month lows, adding to gold’s attractiveness.”
Elsewhere, bitcoin traded above $40,000 for the first time since May last year, boosted by hopes that the United States would soon allow broader trading of the world’s biggest cryptocurrency.