Gold firms above key $4,000 level on US rate cut bets

Markets are pricing in a 25-basis-point cut each in October and December, with probabilities of 94% and 79%, respectively, the CME FedWatch tool shows.

Gold steadied on Thursday, holding firm above the $4,000 level it crossed for the first time ever a day before, amid hopes of further U.S. rate cuts this year and signs of easing tensions in the Middle East.

Spot gold was steady at $4,037.95 per ounce as of 0439 GMT, erasing a 0.5% drop in early trade. The metal touched a record high of $4,059.05 on Wednesday.

U.S. gold futures for December delivery fell 0.3% to $4,056.80.

Federal Reserve officials agreed that risks to the U.S. job market were high enough to warrant a rate cut, but remained wary amid stubborn inflation, per minutes of the September 16–17 meeting released on Wednesday.

Markets are pricing in a 25-basis-point cut each in October and December, with probabilities of 94% and 79%, respectively, the CME FedWatch tool shows.

On Wednesday, Israel and Hamas agreed to the first phase of U.S. President Donald Trump's plan for Gaza, a ceasefire and hostage deal that could open the way to ending Israel's bloody two-year-old war, which the U.N. says constituted a genocide.

"You can't look past the significance of the deal between Israel and Hamas (given) one of the reasons why gold's been moving higher is geopolitical risks, but it's probably just a handy excuse to take profits after hitting another record," said Capital.com analyst Kyle Rodda.

"We still see things as being rather constructive because all the fundamentals (for gold) remain pointed upwards," he added.

Gold has climbed 54% year-to-date on strong central bank buying, increased demand for gold-backed Exchange-Traded Funds (ETFs), a weaker dollar and safe-haven demand.

Global markets also struggled this week amid political turmoil in Japan and France, coupled with an ongoing U.S. government shutdown, sparking a flight to safety in gold.

Non-yielding gold thrives in a low-interest-rate environment and during economic and geopolitical uncertainties.

Elsewhere, spot silver rose 0.2% to $48.98 per ounce, after hitting an all-time high of $49.57 on Wednesday. Platinum slipped 0.4% to $1,656.35 and palladium rose 1.5% to $1,471.46.