Gold hit a record high on Wednesday, boosted by a softer U.S. dollar and hopes of more interest rate cuts, while investors looked for new signals for the Federal Reserve’s interest rate trajectory.

Spot gold was steady at $2,658.08 per ounce, as of 0557 GMT, after hitting an all-time high of $2,670.43 earlier.

U.S. gold futures gained 0.2% to $2,682.10.

The dollar eased 0.2%, making greenback-priced bullion less expensive for other currency holders.

On Tuesday, China announced a slew of support measures including outsized rate cuts, after the U.S. Fed cut rates by 50 basis points last week. Market participants see about 60% chance of another 50 bps cut in November.

After the Fed cut, China’s decision to cut rates has increased another round of liquidity and this could see further demand going into the gold market by Chinese investors, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

The short-term bullish trend remains intact, with resistance at $2,690 level, followed by another level at $2,710, Wong said.

Zero-yield bullion tends to be a preferred investment in a low-rate environment.

Meanwhile, Fed Governor Michelle Bowman said key measures of inflation remain “uncomfortably above” the Fed’s 2% target, warranting caution as the central bank proceeds with trimming rates.

Traders await Fed Chair Jerome Powell’s remarks on Thursday and U.S. inflation data on Friday for further policy cues.

Elsewhere, Israeli airstrike in Beirut killed a senior Hezbollah commander on Tuesday, heightening fears of a full-scale war amid increasing cross-border rocket attacks between both sides.

Inflows to gold exchange-traded funds, particularly from Western investors, will rise in the coming months, providing further support for record-high bullion prices, analysts said. 

Spot silver fell 0.9% to $31.85 per ounce, platinum was down 0.4% to $981.93 and palladium shed 1.3% to $1,042.90.

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