On Monday, the price of gold (XAU/USD) surged, reaching a historic peak near $2,450 during the European trading session. This remarkable climb was fueled by renewed optimism regarding potential interest rate cuts from the US Federal Reserve (Fed) and escalating geopolitical tensions in the Middle East.
Heightened concerns over geopolitical instability were exacerbated by ongoing tensions between Russia and Ukraine, with both nations engaging in aggressive actions against each other over the weekend. Such geopolitical unrest traditionally boosts the demand for safe-haven assets like gold, further driving its upward momentum.
Later in the day, gold traders will closely scrutinize speeches from key Federal Reserve officials, including Bostic, Barr, Waller, Jefferson, and Mester. These addresses are expected to provide valuable insights into the Fed’s future monetary policy trajectory. However, any indication of a cautious or hawkish approach from Fed officials could potentially constrain the upside potential of the precious metal.
As gold continues its ascent to record highs, investors remain attuned to both domestic monetary policy developments and global geopolitical tensions, which are likely to shape the trajectory of the precious metal in the near term.
