• Gold prices reach a new record of $2,141.59, driven by mounting expectations of forthcoming Fed policy easing.
• Reports of slowing business activity in the US services sector contribute to the rally as XAU/USD now trades at $2,133.50.
• A decline in US Treasury yields supports the surge in Gold prices.

Gold prices rallied sharply on Tuesday with the XAU/USD spot reaching an all-time high of $2,141.59 via Reuters. Growing speculation that the US Federal Reserve (Fed) could begin to ease policy increased following two reports highlighting an economic slowdown in the services sector. The XAU/USD trades at $2,133.50, up more than 2.40%.

S&P Global revealed that business activity is slowing down. February’s data was softer than last month, although the S&P Global Composite Index exceeded forecasts. Meanwhile, the Institute for Supply Management (ISM) was weaker than expected, while the US Department of Commerce revealed that Factory Orders plunged.

After the data, XAU/USD edged higher from close to $2,120, pushing toward the all-time high before settling in. US Treasury yields along the short and long end of the curve plummeted as seen on the 10-year benchmark note rate at 4.135%, down eight basis points (bps).