Gold prices cross $2,500 at settlement, snap fresh record high

Gold bars

Gold prices strengthened their gains at settlement today, Aug. 12, amid increased demand for safe havens on renewed geopolitical tensions, paired with expectations for an imminent end to the Federal Reserve’s monetary tightening cycle in September.

Bullion for December delivery closed up 1.25%, or $30.60, at $2,504 an ounce, with the most active yellow metal contract achieving a new record high for the second time this month.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, held steady at 103.16 points at 09:50 pm Makkah time, after touching 103.09 points in early trading.

Jim Wyckoff, senior analyst at Kitco Metals, attributed this increased safe-haven demand to the soaring tensions in the Middle East.

The CME FedWatch Tool showed that market expectations for the Fed to cut interest rates by 25 basis points (bps) during the September meeting advanced to 49.5% from 49% at the end of last week, while forecasts for monetary easing by 50 bps fell to 50.5% from 51%.