Since 2010 all Gmail has been encrypted between Google’s servers and your computer but, as Google announced in a recent blog post, all Gmail wherever it goes will now be encrypted using HTTPS. This includes between Google’s own servers. Google cite ‘last summer’s revelations’ i.e. the NSA as the driver behind this security upgrade.
Although this encryption is great PR I very much doubt it will thwart those that really want to access your email so don’t think all is 100% safe.