Gold prices soared to an all-time high on Monday (May 20). Spot gold jumped 1.4% to $2,448.98 per ounce as of 0614 GMT, having reached a record $2,449.89 earlier in the session. US gold futures also rose 1.5% to $2,453.20.In India, the price of 24K gold surged by ₹540 to ₹75,160 per 10 grams, reflecting the global trend.Key drivers behind the rally US inflation and Federal Reserve expectationsRecent data indicating a cooling trend in US inflation has fueled speculation that the Federal Reserve might soon cut interest rates.This speculation has supported gold prices, as lower interest rates decrease the opportunity cost of holding non-yielding assets like gold.Traders now estimate a 65% chance of a US rate cut by September, according to a Reuters poll.”A soft US dollar and expectations that the Federal Reserve is expected to cut rates soon has helped gold prices,” explained Kyle Rodda, a financial market analyst at subdued dollar makes dollar-priced gold more attractive to buyers using other currencies.Geopolitical tensionsIncreased geopolitical tensions have further driven the demand for gold as a safe-haven asset.Recent incidents include a drone attack on a Russian refinery by Ukrainian forces, leading to its temporary closure.Additionally, Houthi rebels attacked an oil tanker in the Red Sea en route to China.Such uncertainties typically lead to a surge in gold prices as investors seek stability.China’s influenceThe upward movement in gold prices was also influenced by China, the largest consumer of bullion and industrial metals.On Friday, China announced “historic” measures to stabilise its troubled property sector, which has provided additional support to the metals market.”Gold prices sneaked in a cheeky record high ahead of China’s market open on Monday,” Matt Simpson, a senior analyst at City Index was quoted as saying in a Reuters report.”Yet as the move has not been confirmed by a weaker US dollar, it seems to have been caught in a tailwind from higher metals futures on China’s exchanges,” he said.What lies ahead?Investors are now eyeing the minutes from the Federal Reserve’s last policy meeting, set to be released on Wednesday, along with comments from various Fed officials throughout the week.This could provide further direction for the market.Gold’s status as an inflation hedge remains prominent, particularly when juxtaposed with the potential for lower interest rates.As global economic conditions and geopolitical landscapes evolve, the precious metal continues to attract investors seeking both security and value appreciation.Click here to register for CNBC Awaaz’s upcoming webinar, Commodity Gurukul