The price of %Gold is at a record high ahead of the U.S. Federal Reserve’s next decision on interest rates Sept. 18.
The American central bank is widely expected to lower interest rates by 25-basis points at its upcoming policy meeting, news that has sent the price of gold sharply higher in recent days.
Spot gold is currently trading at $2,601.30 U.S. per ounce, its highest level ever. The precious metal has hit successive all-time highs in recent days as expectations build for lower rates.
Futures markets are currently pricing in an 87% chance of a 25-basis-point rate cut at the Fed’s Sept. 18 meeting, and a 13% chance of a 50-basis point cut.
Lower interest rates are seen as benefitting gold as it decreases the opportunity cost of holding the zero-yielding precious metal.
Gold bullion’s price has steadily risen and is now up 30% over the past 12 months.
Other catalysts driving the price include aggressive buying of gold among central banks amid geopolitical uncertainty, and strong consumer demand for the metal, particularly in China.
Some analysts have forecast that gold’s price will top $3,000 U.S. per ounce in 2025.