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The price of %Gold rose to a record high of $2,500 U.S. per ounce as hopes build for the U.S. Federal Reserve to begin lowering interest rates this autumn.

Gold briefly touched the $2,500 U.S. mark before retreating to trade at $2,497 U.S. an ounce.

The move higher comes a day after the U.S. central bank signaled that it could reduce interest rates at its next meeting this September.

Gold’s price increase also comes as tensions escalate in the Middle East after a Hamas political leader was assassinated in an Israeli military strike.

Central banks and investors around the world continue to buy gold amid rising geopolitical uncertainty as it is seen as a safe haven asset during times of turmoil.

In America, the U.S. Federal Reserve decided to hold its trendsetting overnight interest rate at its current target range of 5.25% to 5.50%, its highest level in 23 years.

However, the central bank stressed that progress has been made on lowering inflation and signaled that interest rate cuts are coming.

Speaking to the media, Fed Chair Jerome Powell said: “A reduction in our policy rate could be on the table as soon as the next meeting in September.”

Futures traders are betting 100% that an interest rate cut of 25-basis points will occur this September. Markets are pricing in two more rate cuts this year – in November and December.

Lower interest rates could be supportive of gold prices and lead to even higher prices throughout the remainder of this year, say analysts.

A reduction in interest rates is seen as positive for gold as it lowers the opportunity cost of investing in non-yielding assets.

Gold’s price has hit all-time highs on several occasions this year amid growing expectations for interest rate cuts and as military conflicts escalate around the world.