Update prices
Spot gold rose 0.3 percent to $2,593.79 per ounce by 0539 GMT, up about 0.7 percent so far this week.
Gold prices rose to a record high of $2,599.92 on Wednesday after the Federal Reserve began easing monetary policy by cutting interest rates by half a percentage point.
The bank also expected to cut interest rates by another half percentage point by the end of the year, a full percentage point next year, and an additional half percentage point in 2026.
US gold futures rose 0.2 percent to $2,618.70, according to Reuters data.
“The current trends are very positive for gold, and if these favorable market conditions continue, prices could reach $2,600 to $2,800 in the next 12 months,” said Kyle Rodda, a financial markets analyst at Capital.com.
Lower interest rates in the US and geopolitical tensions are making gold more attractive to hold.
In the Middle East, Israeli warplanes late Thursday carried out their heaviest strikes on southern Lebanon in nearly a year of fighting with Hezbollah, escalating the conflict between the two sides.
“Gold prices are expected to be well supported in the coming months by a weaker dollar and lower bond yields, as well as on the back of rising geopolitical tensions,” BMI said in a note.
As for other precious metals, silver rose in spot transactions by 0.8 percent to $31.03 per ounce, while palladium was stable at $1,080.25.
Platinum fell 0.2 percent to $986.95, down about 0.8 percent since the start of the week.
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