Gold surged to an all-time high above $3,500 per ounce on Tuesday, buoyed by a weaker US dollar and growing expectations that the Federal Reserve will cut interest rates in September.
Spot gold rose as much as 1% to a historic $3,508.50 before easing to $3,487.55 by 0633 GMT. US gold futures for December delivery climbed 1.2% to $3,557.80. The precious metal has gained 32% so far this year.
“A weaker economic backdrop and speculation over US rate cuts are fuelling precious metals,” said Kyle Rodda, analyst at Capital.com. “Concerns about the credibility of dollar assets, given President Donald Trump’s criticism of the Fed, are also supporting gold.”
Trump has repeatedly attacked the Federal Reserve and its chair, Jerome Powell, accusing them of being slow to cut rates. He recently criticised Powell over costly renovations at the Fed’s Washington headquarters and dismissed Fed Governor Lisa Cook over mortgage fraud allegations.
On Monday, Treasury Secretary Scott Bessent said the central bank “is and should be independent,” while acknowledging it had “made a lot of mistakes.”
Markets are now pricing in a 90% chance of a 25-basis-point cut at the Fed’s September 17 meeting, according to CME’s FedWatch tool. Gold, which offers no yield, typically benefits in lower-rate environments as borrowing costs fall and the dollar weakens.
The US dollar is trading near a one-month low against major rivals, further boosting gold’s appeal for overseas buyers.
Long considered a safe-haven asset, gold has repeatedly broken records this year, lifted by central bank demand, investor caution over global growth, and geopolitical uncertainty.
“Gold’s rally could stretch to $3,600 and beyond by year-end if the Fed delivers multiple rate cuts and if the Russia-Ukraine conflict remains unresolved,” said Tim Waterer, chief market analyst at KCM Trade.
Elsewhere in metals, spot silver held at $40.64 per ounce, its highest level since 2011. Platinum gained 1% to $1,412.95, while palladium slipped 0.7% to $1,129.52.
Investors are now awaiting US nonfarm payrolls data on Friday for clearer signals on the Fed’s policy direction.
