Gold prices has hit a record high above $3,500 per ounce on, fuelled by a weaker US dollar and mounting expectations that the Federal Reserve will cut interest rates in September.
Spot gold climbed as much as 1% to a historic $3,508.50 before easing slightly to $3,487.55 by 0633 GMT. U.S. gold futures for December delivery rose 1.2% to $3,557.80. The precious metal has gained 32% so far this year.
“A corollary of the weaker economic backdrop and expectations of US rate cuts is boosting precious metals,” said Kyle Rodda, financial market analyst at Capital.com. “Another factor is the festering confidence crisis in dollar assets because of US President Donald Trump’s attack on Fed’s independence.”
Trump has repeatedly criticised the central bank and its chair Jerome Powell for not cutting rates sooner, and recently attacked Powell over the costly renovation of the Fed’s Washington headquarters.
On Monday, Treasury Secretary Scott Bessent stressed the Fed “is and should be independent” but added it had “made a lot of mistakes.” He also defended Trump’s dismissal of Fed Governor Lisa Cook over mortgage fraud allegations.
Traders are now pricing in a 90% chance of a 25-basis-point rate cut on September 17, according to the CME FedWatch tool. Non-yielding assets such as gold tend to benefit in lower-rate environments.
Rate-cut bets and concerns about the Fed’s independence have pressured the US dollar, which is trading near a one-month low against rivals, making gold more attractive to foreign buyers.
Long regarded as a hedge against turmoil, gold has surged to multiple record highs this year, driven by safe-haven demand, heavy central bank purchases, and broad dollar weakness amid trade and geopolitical uncertainty.
“Gold’s rally could extend to $3,600 and even beyond by year-end if the Fed follows through with multiple rate cuts and if a Russia-Ukraine peace deal remains elusive,” said Tim Waterer, chief market analyst at KCM Trade.
Spot silver was steady at $40.64 per ounce, close to its highest level since 2011, while platinum gained 1% to $1,412.95 and palladium slipped 0.7% to $1,129.52.
Investors are awaiting US nonfarm payrolls data on Friday for further clues on the Fed’s rate path.
Boluwatife Enome
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