New York gold futures have reached a new milestone, closing above $2,600 for the first time on Friday, September 20. This significant jump was driven by a cut in US interest rates and escalating tensions in the Middle East.

The US COMEX gold contract, set to be delivered in December, saw a substantial increase of $31.60 or 1.21%, closing at $2,646.20/oz.

The recent interest rate cut by the Federal Reserve has added to the allure of gold, a non-interest bearing asset. As a result, gold prices have surged 27% this year, marking the largest annual gain since 2010.

Investors have been flocking to gold as a safe-haven asset amid ongoing conflicts in the Middle East and other regions, fueling the price increase.

While some analysts predict a potential correction in gold prices, others believe that the upward trend may continue. The depreciation of the US dollar is expected to make gold more affordable for holders of other currencies, potentially driving up demand.

Fawad Razakzada, an analyst at Forex.com, noted that “geopolitical risks, such as ongoing conflicts in Gaza, Ukraine, and elsewhere, will support the demand for gold as a safe-haven asset class.”

The recent air attack by the Israeli army on Beirut, Lebanon, which resulted in at least 14 fatalities, including Hezbollah’s top military commander, Ibrahim Akil, has further contributed to the escalating tensions in the region.