Gold prices hit an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions. Prices for the yellow metal jumped as much as 3% in Monday trade to reach $2,135 per ounce, rising above the previous record of $2,072 notched in August 2020. Prices later fell on the day to trade at $2,023 by 11.57 a.m. ET. In recent weeks, investors have grown increasingly confident that the US Federal Reserve has successfully reined in inflation through aggressive interest rate hikes, and may start to cut borrowing costs as early as March next year. Higher interest rates push up the yields on assets such as US Treasuries, drawing in investors. But, when interest rates are low, falling or — as in this case — expected to fall, demand for Treasuries ebbs, and gold, which doesn’t pay out any interest, becomes relatively more attractive. The yield on the benchmark 10-year US Treasury bill has fallen from a 16-year high of 5% reached in mid-October to stand at 4.3% Monday. Read more...
