Gold has been boosted by bets on a Federal Reserve interest rate cut as well as a shift into safe havens cause by the Israel-Hamas war
Gold has been boosted by bets on a Federal Reserve interest rate cut as well as a shift into safe havens cause by the Israel-Hamas war AFP News

Gold hit a record high on Monday as growing optimism that the Federal Reserve will cut US interest rates in the new year has dented the dollar in recent weeks.

The precious metal, seen as a safe haven investment, reached an all-time pinnacle at $2,135.39 an ounce before pulling back somewhat amid profit taking.

The dollar was also firmer on Monday.

Gold is benefiting from the Israel-Hamas war, according to analysts.

"Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fueled investor demand for safe haven assets like gold," said Victoria Scholar, head of investment at Interactive Investor.

"Plus, expectations for Fed rate cuts next year have put downward pressure on the US dollar, which is trading around three-month lows, adding to gold's attractiveness," she said.

Elsewhere, bitcoin traded above $40,000 for the first time since May last year, boosted by hopes that the United States would soon allow broader trading of the world's biggest cryptocurrency.

Major stock markets mostly fell, with all three main US indices sliding.

Traders are shrugging off Fed boss Jerome Powell's attempts to temper expectations of US rate cuts in the first quarter of 2024.

Bets on an easing of monetary policy were ramped up when Powell said on Friday that it was "well into restrictive territory" after more than a year of hikes that have put borrowing costs at a two-decade high.

Central banks around the globe have sent interest rates soaring, helping to bring down surging inflation.

But markets enjoyed a banner November, in part on expectations that the Fed is done hiking rates and could soon start cutting. Futures markets show traders currently expect a US rate cut in March.

Bitcoin reached a 19-month high on hopes that firms including BlackRock would be given US approval to sell the first spot bitcoin exchange-traded funds.

"We still don't quite know when it will (happen) but there's a strong belief it will and soon," said Craig Erlam at the trading platform OANDA.

In equities trading, troubled Chinese developer Evergrande briefly surged more than 13 percent in Hong Kong after a court in the city allowed extra time to form a restructuring plan aimed at avoiding liquidation.

The firm, which defaulted on a debt repayment in 2021 and has reported more than $300 billion in liabilities, was hit with a winding-up petition and faces liquidation if officials decide its proposal is not sufficient.

Oil prices fell for a third straight session after the latest production decision by the OPEC+ group of exporters.

Analysts expressed skepticism that producers will respect the latest agreement to cut output further.

New York - Dow: DOWN 0.1 percent at 36,204.44 (close)

New York - S&P 500: DOWN 0.5 percent at 4,569.78 (close)

New York - Nasdaq: DOWN 0.8 percent at 14,185.49 (close)

London - FTSE 100: DOWN 0.2 percent at 7,512.96 (close)

Paris - CAC 40: DOWN 0.2 percent at 7,332.59 (close)

Frankfurt - DAX: UP less than 0.1 percent at 16,404.76 (close)

EURO STOXX 50: DOWN 0.1 percent at 4,414.95 (close)

Tokyo - Nikkei 225: DOWN 0.6 percent at 33,231.27 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 16,646.05 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,022.91 (close)

Euro/dollar: DOWN at $1.0839 from $1.0884 on Friday

Pound/dollar: DOWN at $1.2632 from $1.2710

Dollar/yen: UP at 147.19 yen from 146.82 yen

West Texas Intermediate: DOWN 1.4 percent at $73.04 per barrel

Brent North Sea crude: DOWN 1.1 percent at $78.03 per barrel