The precious metal hit a new record high today at 2482$, as investors turned towards safe haven assets due to geopolitical concerns and expected cuts in global interest rates.
The rise of gold reflects a pivot to safer bets amid rising geopolitical tensions as the Taiwanese stock market took a heavy hit after the non-committal position taken by US presidential candidate Donald Trump on the defense of the island, saying that Taiwan should pay for us protection, which could increase geopolitical risks in Asia.
Especially with his choice of trade hawk J. D. Vance for vice president, who has already alerted the markets that China will occupy a significant place in his foreign policy thinking.
The bond market also rose and gold prices also continued to set new records on Wednesday, supported by the growing conviction that the Fed will cut interest rates in September after Fed Chairman Jerome Powell's comments.
Fed Chairman Jerome Powell said this week that the Fed will not wait until inflation reaches the central bank's 2% target before it starts cutting, and that the recent slowdown in inflation readings adds somewhat to confidence that consumer prices are under control, he said.
Fed Funds futures have priced in a full-fledged US interest rate cut for September, followed by two more cuts before the end of January 2025.
