Concurrently, Bitcoin witnessed a significant surge, reaching over $42,000 (around £33,300), its highest value since May 2022.

The bullish trend in gold prices is partly attributed to the forecast of central banks cutting interest rates to combat slowing economic growth. This expectation arises from a quicker-than-anticipated decline in inflation rates across Britain, the US, and the eurozone. The potential easing of monetary policies has led to a decrease in government bond yields, making gold more attractive relative to fixed-income assets.

Political tensions, notably conflicts involving Israel and Hamas and in Ukraine, have further driven gold’s demand as a safe-haven asset. Central banks, particularly the People’s Bank of China, have notably increased their gold holdings this year, as reported by the World Gold Council. A softer dollar, down 2.63% against a basket of currencies over the past month, has also bolstered gold’s appeal.

Ricardo Evangelista, a senior analyst at ActivTrades, noted: “Gold prices touched an all-time high during early Monday trading, reflecting growing expectations of a Federal Reserve rate cut within the first quarter of 2024 and simmering geopolitical instability in the Middle East.

“With inflation coming down faster than expected and economic activity showing signs of weakness, investors are growing increasingly hopeful that the next Fed move will be a cut, which could, according to the most optimistic, come as early as March next year.

“Against this background, with softening treasury yields, the opportunity cost of holding the non-yielding metal is decreasing, with demand and prices moving in the opposite direction. At the same time, tensions are again rising in the Middle East, with attacks on ships in the Red Sea driving the precious metal’s haven appeal.”

Meanwhile, the cryptocurrency market has shown resilience, with Bitcoin crossing the $42,000 threshold and Ethereum reaching $2,260 (around £1,800), up 8%. This upswing is credited to an optimistic outlook for riskier assets in a potentially declining interest rate environment and a recent regulatory crackdown that has instilled greater confidence among investors.