Gold reaches unprecedented peaks fueled by demand for safe-haven assets and speculation regarding rate cuts in the US.

Gold prices surged to a historic high on Thursday, marking their most significant monthly gain in over three years, driven by expectations of U.S. interest rate cuts and robust demand for safe-haven assets.

Spot gold rose by 1.22% to reach $2,220.8569 per ounce, marking its strongest performance since July 2020 with a notable 9% increase for the month and a consecutive quarterly rise. The precious metal peaked at a record $2,225.09 per ounce earlier in the trading session.

U.S. gold futures concluded 1.2% higher at $2,238.4.

Daniel Ghali, commodity strategist at TD Securities, attributed the upward momentum in gold prices to traders adjusting their positions ahead of the holidays, alongside heightened trading activity towards the month and quarter-end. He emphasized that gold could see further gains if market sentiment leans towards anticipating more aggressive interest rate cuts by the Federal Reserve. However, Ghali cautioned about potential signs of buying fatigue in the near term.

Furthermore, Everett Millman, chief market analyst at Gainesville Coins, pointed out that ongoing geopolitical tensions globally are also contributing to the bullish sentiment for gold, as investors seek refuge in the precious metal as a neutral reserve asset.

While there are indications of inflation running higher than desired by policymakers, Millman noted that this alone doesn't fully explain the current elevated valuations for gold.

Investors are closely monitoring the upcoming U.S. core personal consumption expenditure (PCE) price index report, scheduled for release on Friday, to assess the Federal Reserve's policy stance. Presently, traders are pricing in a 64% probability of a rate cut in June, according to CME's FedWatch tool.

MKS PAMP commented in a note that the new and elevated floor for gold stands at $2,000/oz, symbolizing a shift in the macroeconomic regime, with central banks showing tolerance towards prolonged inflation at higher levels.

In the broader market, silver increased by 0.82% to $24.8684 per ounce, platinum rose by 1.49% to $907.0491, and palladium surged by 3.19% to $1,014.6951. All three metals were on track for monthly gains.