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Gold prices surged to a record high Tuesday as a cocktail of factors, from hopes of further U.S. rate cuts and China stimulus measures to elevated Middle East tensions, lifted demand.

Spot gold steadied at $2,628.63 per ounce as of 0903 GMT after hitting a record high of $2,639.95 earlier in the day.

U.S. gold futures were flat at $2,653.30.

Bullion scaled multiple record-highs after the U.S. Federal Reserve cut interest rates last week by a larger-than-usual 50 basis points. Bank of Chicago President Austan Goolsbee said he expects many more cuts over the next year.

“The possibility of another 50 bps cut at the next Fed meet and China’s measures are lifting gold prices. There is always a risk of price correction but it might be small as investors who missed out on the rally will use it as an opportunity to add exposure,” said UBS analyst Giovanni Staunovo.

China’s central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk.

This news is mixed for Chinese bullion demand as lower rates should support demand, but could support alternative assets like Chinese equities and the real estate market, Staunovo added.

Lower rates reduce the opportunity cost of holding gold since it pays no interest.

Gold has jumped more than 27% in 2024, with prolonged conflicts in the Middle East adding to safe-haven demand.

Israel’s military said it struck dozens of Hezbollah targets in southern Lebanon overnight, a day after launching a wave of airstrikes.

Focus will be on Fed Chair Jerome Powell’s remarks on Thursday and US PCE data on Friday, said Ricardo Evangelista, senior analyst at ActivTrades.

“If these events reinforce the dovish outlook, further gold price increases seem likely.”

Spot silver rose 0.8% to $30.91, platinum gained 1.6% to $971.30 and palladium climbed 2.1% to $1,063.50.

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