Gold accelerated to a historic high on Tuesday, as bets on rate cuts by the U.S. Federal Reserve strengthened and some analysts remained bullish on the long-term outlook for further gains.

Adrian Ash, director of research at BullionVault, said: "Like stocks and bonds, gold wants to go up, for the same reasons. The Fed is finally preparing to cut rates, because it begins to believe it has beaten inflation."

Expectations of a Fed rate cut later this year have weakened the dollar and U.S. bond yields, boosting the appeal of metals as an investment.

Fawad Razaqzada, market analyst at City Index and Forex.com, pointed out: "As bond yields continue to be under pressure due to weak economic data and falling inflation pressures, this helps to boost the appeal of low and zero-yielding assets, keeping the outlook for gold bulls optimistic."

Ryan McIntyre, managing partner at Sprott, said that after reaching a peak in October 2020, the holdings of gold ETFs fell 26%, but seem to have bottomed out in May 2024. He said demand for gold ETFs is now "on the rise again," adding that he believes "gold may experience a new wave of demand through this channel, especially from financial advisers and institutions."

The strength of gold has prompted the world's largest gold ETF - SPDR Gold Shares (GLD) to rise.

Edmund Moy, former director of the United States Mint and senior strategist at US Money Reserve, the main distributor of precious metals issued by the U.S. federal government, recently said that after the attempted assassination of former President Trump could cause "political uncertainty," gold prices on Monday almost reached a historic high.

However, he pointed out that the political uncertainty of the day was later replaced by two other influencing factors: Federal Reserve Chairman Powell's last speech before the quiet period, and disappointing GDP data from a major Asian country.

Moy said that weak inflation and employment data in June may be enough to push the Fed to start cutting interest rates soon, and once in a rate-cutting cycle, gold is likely to receive a boost. In addition, new data shows that the economy of a major Asian country is still struggling, and investors have almost no other options, but gold is one of them.

He added:"Gold demand is rising while supply is limited, which usually means that gold prices are rising.

However, if the Fed remains cautious and hopes to see more supportive data before cutting rates, gold prices may be negatively affected in the short term. In the medium to long term, "most of the factors driving gold price increases have not changed: the Fed will eventually cut rates, geopolitical instability will increase, major Asian economies will struggle, and central banks will demand gold," Moy said.

However, if the Federal Reserve remains cautious and hopes to see more supportive data before cutting interest rates, the gold price may be affected by "short-term negative factors". In the medium to long term, "most of the factors that drive gold prices up have not changed: the Federal Reserve will eventually cut interest rates, geopolitical instability will increase, major Asian economies will be in trouble, and central banks will demand gold," Moy said.