Gold Surges to Historic Highs Amid Expectations of Continued Interest Rate Cuts

Gold prices hit a record high Tuesday, climbing to $3,758.03 per ounce as investors bet on more U.S. interest rate cuts and the dollar weakened slightly. This marks another milestone in gold's impressive rally, driven by expectations that cheaper money will make the precious metal more attractive to investors.

Spot gold rose 0.2% to $3,752.43 per ounce at 01:23 GMT, after touching that all-time high earlier in the session. December gold futures climbed even higher, gaining 0.3% to $3,787.60.

The dollar index dropped 0.1%, which helped gold's appeal since a weaker dollar makes the metal cheaper for buyers using other currencies. This relationship has been a key driver in gold's recent surge, as traders position themselves ahead of potential Federal Reserve rate cuts.

Here's what this means for investors: Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold. When bonds and savings accounts offer less return, gold becomes more attractive as a store of value and hedge against inflation.

Other precious metals showed mixed performance. Silver fell 0.2% to $43.98 per ounce but remained near its 14-year high. Platinum bucked the trend, rising 0.3% to $1,420.45, while palladium posted the strongest gain at 0.9% to $1,189.84.

The precious metals market has been on a tear this year, with gold benefiting from geopolitical tensions, inflation concerns, and central bank buying. Many analysts see continued strength ahead, especially if the Fed follows through on expected rate cuts in coming months.