Gold Hits Record High After Federal Reserve Decision to Keep Interest Rates Unchanged
Historic Surge in Gold Prices
Gold prices soared to a record high on Thursday, driven by expectations of interest rate cuts by the U.S. Federal Reserve and ongoing geopolitical tensions. Spot gold rose 0.2% to $3,052.92 per ounce at 00:30 GMT, after reaching an all-time high of $3,055.31 per ounce earlier in the session. Meanwhile, U.S. gold futures climbed 0.7% to $3,061.00, according to Reuters.
Federal Reserve's Decision and Market Impact
On Wednesday, the Federal Reserve kept its benchmark interest rate unchanged in the 4.25%-4.50% range, while policymakers signaled two potential rate cuts of 0.25% each by the end of 2025. This dovish stance has fueled optimism for gold, as lower interest rates enhance the appeal of the non-yielding metal.
Key Drivers Behind Gold’s Rally
Several factors have contributed to gold's record-breaking performance, including:
- Geopolitical Uncertainty: Renewed tensions in the Middle East, especially Israel’s resumed airstrikes on Gaza, have pushed investors toward safe-haven assets.
- Interest Rate Expectations: The prospect of lower borrowing costs makes gold a more attractive investment.
- Economic Uncertainty: Market volatility, tariff concerns, and global financial instability have increased demand for gold as a hedge.
Gold’s Exceptional Performance in 2025
Since the start of 2025, gold has achieved 16 record highs, with four instances surpassing the $3,000 mark per ounce. This highlights the strong demand for the metal amid macroeconomic uncertainties.
Performance of Other Precious Metals
Other precious metals also recorded gains:
Silver edged up 0.1% to $33.84 per ounce. Platinum increased 0.4% to $996.80 per ounce. Palladium rose 0.1% to $959.65 per ounce. Gold continues to shine as a safe-haven asset, supported by interest rate speculation and geopolitical risks. With uncertainty persisting, could gold reach new highs in the coming weeks? Investors and analysts will be closely watching the market for further developments.
