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Gold prices surged to a record high in ​Asian trade on Monday, driven by a series of recent gains and market speculation regarding potential interest rate cuts by the ​Federal Reserve in ​March 2024. These gains were bolstered by factors such as easing ​inflation, soft labor market data, and less-hawkish signals from the Fed.

In addition to these factors, the near-term demand for gold was further fueled by an attack on an American warship and commercial vessels in the Red Sea. This event heightened concerns about a potential escalation in the Israel-Hamas war.

Chair Jerome Powell’s recent statements also played a role in shaping market expectations. While he reiterated that U.S. rates would remain higher for a longer period, there were changes in his signaling that suggested a different outlook. Powell acknowledged the progress made in curbing inflation and the potential for a “soft landing” for the U.S. economy. These signals reinforced expectations that the Fed may not raise interest rates in December and could potentially start cutting them by March 2024.

As a result of these factors, spot gold experienced a significant jump of nearly 2%, reaching a record high of $2,148.78 per ounce. February gold futures also rose by 2%, reaching a record high of $2,151.20 per ounce. It is worth noting that both instruments were slightly below their peak prices by 19:16 ET (00:16 GMT).

Furthermore, gold enjoyed strong gains throughout last week and also registered a consecutive monthly increase in November. This demonstrates the sustained upward momentum in gold prices in recent times.