Gold prices climbed on Thursday after hitting a record high in the previous session, as the US Federal Reserve delivered a super-sized interest rate cut.

Spot gold rose 0.8% to $2,578.40 per ounce, as of 0734 GMT, after scaling a record high of $2,599.92 on Wednesday. US gold futures edged 0.2% higher to $2,604.20.

The Fed kicked off with a larger-than-usual 50-basis-point reduction on Wednesday that Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation has eased.

Powell, however, said the economy remained strong, with many job market indicators including unemployment claims and even the current 4.2% unemployment rate not being at worrying levels.

“Gold prices are idling near yesterday’s closing price as markets digest the seesaw volatility in the wake of the Fed rate decision,” said Ilya Spivak, head of global macro, Tastylive.

Zero-yield bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.

Traders are currently anticipating a 65% chance of a 25 bp reduction at Fed’s November meet and a 35% chance of a 50-bp cut, according to the CME FedWatch tool.

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“Gold is likely to reach new highs between $2,640 and $2,700 this year. Softening economic data could be catalysts for higher gold prices,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

Market will also keep a tab on the initial US jobless claims data, which is due at 1230 GMT.

On the geopolitical front, Hezbollah devices exploded again in Lebanon on Wednesday, stoking tensions of a wider Middle-East conflict, a day after similar explosions of the group’s pagers.

Among other metals, spot silver was up 3.4% at $31.09 per ounce, platinum climbed 1.8% to $985.85 and palladium gained 1.4% to $1,076.50.