Price of gold hits new record above $2,262

The precious metal has been buoyed by the expectation that the US Federal Reserve will begin cutting interest rates in June.

Gold prices touched a new historic high this Monday, with the precious metal being buoyed by the expectation that the United States Federal Reserve will announce the first interest rate cut in June.

The gold benchmark price was up 1.2% to $2,258.53 per ounce, after hitting a new historic high of $2,262.19 during the morning.

"The absence of any positive surprises in the release of the PCE [Personal Consumption Expenditures Price Index] may have given more green light for gold prices to advance into new record territory," said IG strategist Yeap Jun Rong to Reuters.

The PCE price index released last week is currently at nearly two-year lows, giving the Fed room to proceed with interest rate cuts earlier, Jun Rong argues.

US inflation measured by the PCE accelerated to 2.5% in February on an annual basis, up from 2.4% in January, but slowed to 0.3% on a monthly basis, down from 0.4% in January.

Investors are currently assigning a 69% probability that the entity led by Jerome Powell will announce the first interest rate cut in June, according to FedWatch from the CME Group. Lower interest rates are positive for gold prices.