Global spot gold prices soared to new heights on Monday, reaching $2,740 per ounce, following multiple records since the year began.

Experts predicted possible fresh highs backed by US Federal Reserve interest rate cuts, geopolitical uncertainties and purchases from central banks.

Such a trend is set to favor gold mining companies while presenting challenges for downstream retail sales, said experts, adding companies ought to innovate by offering products with smaller weight variations and novel features to entice consumers.

Li Yuefeng, a researcher at the Beijing Gold Economy Development Research Center, said that escalating conflicts in the Middle East, the impending US election and expectations of loose monetary policies worldwide have propelled a surge in gold demand as safe-haven assets, driving up international gold prices to break past $2,700 per ounce, establishing a new all-time high.

Li said this year has witnessed a remarkable increase of over 30 percent in international gold prices, the most significant annual surge since 1979. Looking ahead, Li highlighted the upcoming release of the Purchasing Managers' Index data as an important factor influencing gold prices.

"If the PMI data continues to show better-than-expected performance, the US dollar may rise against other currencies to new highs as investors could further reduce their bets on Fed rate cuts," said Li. "Conversely, if the PMI unexpectedly drops below 50, indicating a contraction in private business activity, it could exert pressure on the dollar, thereby driving international gold prices higher. This week may see a risk of a slight drop of gold prices after reaching new highs."

Liu Shikai, manager of research and development at a trading center under the Shandong Zhaojin Gold and Silver Refinery Co Ltd, said that the recent surge in international spot gold prices to cross $2,700 per ounce was predominantly driven by regional tensions.

He anticipated a continued upward trajectory for international gold prices in the near term, potentially reaching new historical peaks. Geopolitical tensions, mounting uncertainties surrounding US politics and the economy in anticipation of the election, remain pivotal in supporting international gold prices.

Furthermore, a recent report from the World Gold Council highlighted that central banks' gold purchases have contributed and will continue to contribute to the uptrend in gold prices. In July, global central banks' net purchase of gold reached 37 metric tons, marking a 206 percent increase from the previous month, the highest monthly increase since January. The WGC has forecast a continuation of this trend among global central banks in the near future.

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