• Gold consolidates just below new all-time highs on Thursday. 
• Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors. 
• XAU/USD is overbought but rallying and in an uptrend on all timeframes. 

Gold (XAU/USD) trades marginally higher in the $2.660s per troy ounce on Thursday amid falling global interest rates, an escalation of the conflict in the Middle East, and a weaker US Dollar (USD) due to increased odds of the US Federal Reserve (Fed) continuing with its aggressive monetary easing strategy. 

Gold trades close to record highs

Gold trades just below its record high of $2,670 recorded on Wednesday. The decisions by the People’s Bank of China (PBoC), Swedish Riksbank and Central Bank of Czech Republic to slash interest rates over recent days is advantageous for Gold as it lowers the opportunity cost of holding the non-interest-paying asset, making it more attractive to investors.

A further upside factor is the escalation of the conflict between Israel and Hezbollah. On Wednesday, amid continued missile exchanges between the two enemies, the head of the Israeli Defence Forces, Herzi Halevi, told his troops in northern Israel that they should prepare for a ground offensive on Lebanon. If such an invasion should take place, it will further ratchet up risk aversion and increase safe-haven flows into the yellow metal.