Gold touched an all-time high on Thursday as the US Federal Reserve signalled two possible interest rate cuts this year, adding to the bullion's appeal amid ongoing geopolitical and economic tensions.

Spot gold held steady at US$3,047.1 (HK$23,772) an ounce as of 0700 GMT, after hitting a record high of US$3,057.21 earlier in the session.

US gold futures gained 0.4 percent to US$3,054.10.

Gold is driven by "a lot of uncertain market situations, geopolitical tensions, weaker U.S. dollar and expectations that interest rates will be cut later", said Dick Poon, general manager at Heraeus Metals Hong Kong.

On Wednesday, the Fed left its benchmark rate unchanged in the 4.25 percent-4.50 percent range, as was widely expected. Policymakers anticipate two quarter-percentage-point cuts by the end of 2025.

Non-yielding bullion thrives in a low interest rate environment.

US President Donald Trump's initial policies, including tariffs, appear to have tilted the U.S. economy towards slower growth and higher inflation, at least temporarily, Fed Chair Jerome Powell said.

Trump's tariffs have flared trade tensions and are widely seen as inflationary and detrimental to economic growth.

The tariff uncertainty, rate cut possibilities and escalating tensions in the Middle East have contributed to gold's rally, prompting it to notch 16 record highs so far in 2025, with four being above the US$3,000 milestone.

REUTERS

A security guard places several one-kilo gold bars inside a secured vault in Dubai in this April 20, 2006 file photo. REUTERS/Tamara Abdul Hadi/Files (UNITED ARAB EMIRATES - Tags: BUSINESS)

Gold scales record peak as Fed signals two rate cuts in 2025