Gold prices surged on Tuesday, reaching new record levels as traders grew more convinced that the Federal Reserve will begin cutting interest rates in September, which weakened the dollar.

Markets are now awaiting more cues on interest rates from the Federal Reserve, with its Chair Jerome Powell set to speak at the Jackson Hole Symposium on Friday.

Spot gold rose by 0.7% to $2,521 per ounce. Spot prices hit a record high of $2,510.45 per ounce last week, with the yellow metal making strong gains amid growing conviction that the Fed will start cutting rates from September.

Traders see a 76% chance that the Federal Reserve will reduce rates by 25 basis points, and a 24% chance for a 50 basis points cut, according to CME FedWatch data.

Lower interest rates are a positive scenario for gold prices, as they reduce the opportunity cost of investing in non-yielding assets.

Fed Chair Jerome Powell’s speech on Friday is expected to provide more cues on the bank’s plans to cut rates, though analysts do not expect the Fed Chair to explicitly mention how much the central bank plans to cut rates.

On the other hand, platinum futures fell 0.1% to $964.65 per ounce, while silver futures rose 0.4% to $29.415 per ounce. Silver was the better performer between the two, rising in tandem with recent gains in gold.

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