Washington, Sept. 2, 2025 – Gold briefly hit a record high as the prospect of US interest-rate cuts and growing concerns over the Federal Reserve’s future lent fresh impetus to the multiyear rally in precious metals.
Bullion for immediate delivery rose as much as 0.9% on Tuesday to top $3,508 an ounce, surpassing the previous peak reached in April, before paring gains as the dollar rallied.
The precious metal has risen more than 30% this year, making it one of the best-performing major commodities.
The latest run has been fueled by expectations the US central bank will lower interest rates this month, after Fed Chair Jerome Powell cautiously opened the door to a reduction.
A key US jobs report this Friday is likely to add to signs of an increasingly subdued labor market — supporting the case for rate cuts.
That has boosted the allure of precious metals, which don’t pay interest.
“Investors adding to gold allocations, especially as Fed rate cuts loom, are pushing prices higher,” UBS Group AG strategist Joni Teves said. “Our base case is that gold continues to make new highs over the coming quarters.
“A lower interest rate environment, softer economic data and continued elevated macro uncertainty and geopolitical risks boost gold’s role as a portfolio diversifier.”
Both gold and silver have more than doubled over the past three years, with mounting risks in the spheres of geopolitics, the economy, and global trade driving increased demand for the time-honored haven assets.
An escalation in President Donald Trump’s attacks against the Fed this year has become the latest cause for investor alarm, with concerns over the central bank’s independence threatening to erode confidence in the US.
Markets are now waiting for a landmark ruling on whether Trump has legitimate grounds to remove Fed Governor Lisa Cook from the central bank.
If deemed legal, the move would allow the president to replace her with a dovish-leaning official.
Separately, a federal appeals court said late Friday that Trump’s global tariffs were illegally imposed under an emergency law, increasing uncertainty for American importers while potentially delaying the economic dividends promised by the administration.
“The last time gold hit $3,500 was during intra-day trading, so we would be keen to see if gold manages to make a daily close above that level as that could lend some momentum,” said Oversea-Chinese Banking Corp currency strategist Christopher Wong, referring to the metal’s April peak.
“There is still risk of fresh geopolitical risks and policy uncertainties returning, and that would lend a kicker to gold.” (Bloomberg)
