Gold prices continued their record-breaking streak on Tuesday, holding strong above the crucial $2,500 mark. This surge is driven by a weaker dollar and rising investor confidence that the Federal Reserve may cut interest rates in September.

Spot gold climbed 0.1% to $2,507.45 per ounce, after reaching an all-time high of $2,531.60 earlier in the day. U.S. gold futures also gained 0.2%, settling at $2,545.60. The dollar index fell to a seven-month low, making gold more appealing to international buyers, while U.S. 10-year bond yields declined.

Aakash Doshi, head of commodities at Citi Research, noted that improved sentiment and increased ETF buying are key factors behind this rally, predicting gold could hit $2,600 by the end of 2024 and possibly $3,000 by mid-2025.

However, some experts caution that the current bullish positioning might be overextended, and any shift in the narrative around Fed rate cuts could trigger a correction. Despite this, gold has risen more than 20% this year, marking its best performance since 2020.

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