Gold price breaks records, markets anticipate interest rate cut

The price of gold reached another historic high on Tuesday, reaching €3,294.75 per ounce during Asian trading. Despite the subsequent decline, it remained above €3,272, representing a daily increase of 0.3 percent.

Investors expect the US Federal Reserve to make further interest rate cuts – the probability of such a move in October was as high as 97 percent.

Demand for gold is also being supported by uncertainty over a possible shutdown in the US, i.e., the temporary suspension of government operations due to a failure to pass a budget.

Market analyst Tai Wong points out that growing investor concerns are increasing the appeal of gold as a safe haven. Since the beginning of September, the price has risen by more than 11 percent and is heading for its biggest monthly gain since August 2011. Overall, gold gained 16.5 percent in the quarter.

(reuters, mja)