XAU/USD hits record highs as US-China tensions fuel safe haven demand

Gold prices surged to fresh all-time highs above $2,750 per ounce, gaining 1.2% amid escalating US-China tensions and pre-FOMC positioning. The precious metal's rally intensified as geopolitical uncertainties combined with expectations of a dovish Federal Reserve pivot at Wednesday's policy meeting. Markets are pricing in a 65% probability of a 25 basis point rate cut, which would mark the Fed's first easing since March 2020. The dollar index weakened 0.4% to 105.80, providing additional tailwind for gold prices. EUR/USD advanced 0.35% to 1.0985, while AUD/USD climbed 0.5% to 0.6680, benefiting from dollar weakness despite China concerns. Technical analysis shows gold breaking above the psychological $2,750 barrier with next resistance at $2,800. Traders anticipate continued volatility ahead of the Fed decision, with gold maintaining its appeal as the ultimate safe haven amid mounting global uncertainties.