Gold prices broke past $4,500 in Asian trade overnight, on optimism that the US Federal Reserve will continue cutting interest rates next year, and amid rising tensions between the United States and Venezuela.
The precious metal hit a peak of $4,519.78 to extend a rally that has seen it surge more than 70% since the start of 2025.
Other precious metals have also seen significant price increases in recent times.
Silver jumped 1.2% in overnight trade to a record $72.27 per ounce, and was set for an annual rise of almost 150%, its best year ever.
Yesterday spot platinum jumped 3.5% to $2,193.60, a level not seen in more than 17 years, while palladium rose 1.6% to a three-year high of $1,786.94, tracking gains in gold and silver.
Markets are currently pricing in two interest rate cuts for 2026 as reports of President Trump's plans to name a new Federal Reserve chair early next year reinforce expectations for dovish monetary policy.
The rise in the price of precious metals also reflects growing uncertainty around the direction of the wider economy.
On the geopolitical front, US President Donald Trump last week ordered a "blockade" of all sanctioned oil tankers entering and leaving Venezuela. He also said he was not ruling out the possibility of war with the South American country.
Investors are also concerned about the potential for an AI bubble, while many are also looking to diversify their assets beyond the tech-heavy US stock market.
