Gold prices hit fresh highs amid US rate cut expectations

Gold prices hit a new all-time high on Tuesday amid growing expectations of US rate cuts in September and after the People’s Bank of China issued new import quotas.

Spot gold jumped above $2,525 an ounce earlier in the day, surpassing Friday’s record high.

John Meyer, partner and head of research at SP Angel said Chinese exporters and traders have been seen rushing to buy yuan and probably gold "in anticipation of further US dollar weakness".

In addition, the yellow metal has been buoyed by Chinese buying after the PBoC cracked down on local government bond buying, he said.

Looking forward, Meyer said investors are awaiting comments from the Jackson Hole meeting where Federal Reserve governors are expected to comment on the potential for rate easing from September.

"Traders are loading up on gold and bonds in advance of the Jackson Hole symposium," he said, noting that some economists are speculating that chair Jerome Powell may hint towards a 50 basis points cut, with cuts of up to 200-250bp this year if non-farm payrolls data shows further weakness.