Gold futures edged lower Monday after reaching an all-time high on Sunday night in electronic trade.
Gold
GC00,
was trading at $2,084,30 an ounce, having reached $2,152.30 overnight.
Expectations the Fed will cut interest rates next year, as well as tension in the Middle East, have helped fuel the yellow metal.
“This comes mostly as a result of both a weaker dollar, the expectation that the dollar will continue to weaken and ongoing geopolitical pressures,” said David Stritch, currency analyst at Caxton. According to the CME FedWatch tool, markets are pricing in a nearly 60% chance of an interest-rate cut by March.
Analysts at UBS cautioned against “chasing” the gains.
“Given the rally over the past few weeks and the aggressive Fed rate cut expectations implied, we wouldn’t chase prices higher in the near term. Still, the asset has again demonstrated its effective role in diversifying portfolio returns and hedging against risks,” they said in a note to clients.