Gold futures reached a historic milestone on Monday, settling at the highest level ever recorded since the contract's creation in 1974. The April gold contract gained $30.60, or 1.46%, to settle at $2,126.30 per ounce. This marks the second consecutive trading session in which gold has reached a record high, with the April contract closing at an all-time high of $2,095.7 on Friday.

The surge in gold prices is driven by expectations that the Federal Reserve will begin cutting interest rates in the second half of the year. Traders are betting on lower rates as economic data, particularly in the manufacturing sector, came in weaker than expected last week. Bart Melek, the global head of commodity strategy at TD Securities, stated that the anticipation is that inflation will likely moderate over time as the economy weakens, giving the Fed room to implement rate cuts.

Peter Boockvar, chief investment officer at Bleakley Financial Group, believes that gold has further upside potential. When adjusted for inflation, gold reached an all-time high of approximately $3,200 in 1980. Boockvar stated that gold is still a ways away from that level, indicating room for further growth. He also attributed gold's recent performance to central banks worldwide purchasing significant amounts of the precious metal, prompted in part by geopolitical tensions and concerns regarding the concentration of foreign assets in U.S. Treasuries.

The VanEck Gold Miners ETF (GDX) closed higher by 4.3%, signalling a bullish sentiment in the gold market. It is also worth noting that gold is trading above its 50-day moving average of $28.295 for the first time since January 12.

While gold's outlook seems positive, some headwinds could potentially impact its prices. If economic data, especially on employment, comes in stronger than expected, it may deter the Fed from implementing rate cuts, leading to a potential reversal in gold prices.

Year to date, gold has demonstrated solid performance, with a 2.63% increase. Market analysts will closely monitor the Fed's actions and economic data for further insights into the future trajectory of gold prices.

In summary, gold futures settled at an all-time high, propelled by expectations of Federal Reserve rate cuts and weakening economic data. While the precious metal still has room to reach its inflation-adjusted record, potential headwinds such as robust employment could temper its upward trajectory. Investors and traders will closely watch for updates from the Fed and economic indicators to gauge the future direction of gold prices.