Gold prices continued their high momentum since last week and managed to break their record high of $5,110 as momentum amid growing concerns, especially about geopolitical conflicts and the Fed's monetary policy stance.
At 9.20 am, gold prices were at $5,064, up 1.16% since it opened in early trading on Tuesday in the Asian session.
Large-scale investors quickly shifted to safe assets as concerns grew over the strained relations between the United States and its major allies, including Europe and Canada.
US President Donald Trump's threat to impose 100 percent tariffs on Canadian goods if the country reaches a trade deal with China sparked new concerns about a resurgence of the global trade war.
At the same time, concerns about the independence of the Federal Reserve (Fed) also supported the rise in gold prices. The market awaited Trump's choice of candidate for the new Fed Chair after he confirmed that the interview process had been completed.
The appointment of a more dovish chairman could raise expectations of further rate cuts this year, supporting gold prices.
Lower interest rates reduce the cost of holding gold, making the precious metal more attractive in an environment of policy and geopolitical uncertainty, even though it does not offer a yield.
Market attention is now focused on the Fed's monetary policy decision early Thursday morning. The US central bank is expected to keep its benchmark interest rate in a range of 3.50 to 3.75 percent.
Fed Chairman Jerome Powell's remarks after the meeting will be closely watched for policy direction for the period ahead. A more hawkish tone could strengthen the US dollar in the short term and put pressure on dollar-denominated commodity prices.
