Gold prices hit a new record high on Monday amid growing expectations that the US Federal Reserve (Fed) will cut interest rates this year.

The precious metal reached a new high of $2,265.73 on Monday.

Austerity decision from France, whose credit rating has fallen! Austerity decision from France, whose credit rating has fallen!

On Friday, the closely watched US personal consumption expenditures (PCE) index showed a small increase in March from February, but core data declined slightly.

Fed Chairman Jerome Powell said the report was "pretty much in line with expectations" and that policymakers were on track to achieve their long-term inflation target of two percent.

Powell said that while the latest inflation data was higher than the Fed would have liked, the February figures were "certainly more in line with what they would like to see."

The data appeared to have little impact on experts' expectations for a rate cut in June, but Powell warned that rates were unlikely to fall to levels seen after the 2008 global financial crisis.

Adding to the upward pressure on prices, demand for gold is also pushing prices higher amid rising geopolitical tensions and fears that Israeli attacks on Gaza will spread further.

Sunday's airstrike on Lebanon and Israel's claim that the commander of Hezbollah's missile unit had been "eliminated" further heightened tensions.

Israel and the Iran-backed group have been exchanging cross-border fire almost every day for months. Investors are also keeping a close eye on developments in the long-running war in Ukraine. Central banks cutting borrowing costs is seen as a positive development for gold, which does not yield any interest, because its safe-haven status makes it more attractive to investors.

Editor: David Goodman