Reuters
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Gold sailed previous $3,500 per ounce to a record high Tuesday, as a weaker dollar and mounting expectations of a Federal Reserve interest rate cut in September boosted the dear steel’s attraction.
The price of gold hit $3,508.50 per ounce. Bullion has gained greater than 30% to date this yr.
“A corollary of the weaker economic backdrop and expectations of US rate cuts is boosting precious metals,” Capital.com monetary market analyst Kyle Rodda stated. “Another factor is the festering confidence crisis in dollar assets because of US President Donald Trump’s attack on Fed’s independence.”
Trump has criticized the Fed and its chair, Jerome Powell, for months for not reducing charges and lately took intention at Powell over a expensive renovation of the central financial institution’s Washington headquarters.
On Monday, Treasury Secretary Scott Bessent informed Reuters the Fed is and needs to be impartial however added that it had “made a lot of mistakes” and defended Trump’s proper to fireplace Fed Governor Lisa Cook over allegations of mortgage fraud.
Traders are presently pricing in a 90% likelihood of a quarter-of-a-percentage-point Fed rate cut on September 17, based on the CME FedWatch instrument.
Non-yielding gold sometimes performs nicely in a low-interest-rate setting.
Rate-cut expectations and worries over the Fed’s independence have weighed on the US dollar, which is languishing close to a greater than one-month low in opposition to its rivals, making gold inexpensive for abroad patrons.
Long considered a reliable hedge in opposition to geopolitical and financial turmoil, gold has rallied to a number of record highs in 2025, drawing assist from ongoing shopping for by central banks amid a transfer away from the US dollar, sturdy safe-haven demand in mild of geopolitical and commerce uncertainty, plus broad dollar weak point, analysts say.
Gold costs rose 27% in 2024 and broke the $3,000 per ounce stage for the primary time in March this yr as uncertainty round Trump’s commerce insurance policies despatched traders flocking to the safe-haven asset.
“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,” KCM Trade chief market analyst Tim Waterer stated.
Investors at the moment are wanting ahead to the US nonfarm payrolls knowledge due Friday to find out the dimensions of an anticipated Fed rate cut later this month.
The price of silver was little modified at $40.64 per ounce, after hitting its highest since September 2011 within the earlier session.