Gold prices surged to an all-time high on Tuesday, supported by expectations of an imminent US interest rate cut and a weaker dollar. Investor demand for safe-haven assets has intensified amid economic uncertainty and political tensions over central bank policy.
Record high on rate-cut expectations
Spot gold rose by 0.5 per cent to $3,493.99 per ounce after touching a record high of $3,508.50. December futures climbed 1.4 per cent to $3,564.40. Markets are pricing in a 90 per cent likelihood that the Federal Reserve will reduce rates by 25 basis points at its 17 September meeting. The outlook has been shaped by weaker economic indicators and expectations that the Fed will act to stabilise growth.
Weaker dollar supports demand
The US dollar hovered near five-week lows, adding momentum to gold’s rally by making the metal cheaper for holders of other currencies. Investor sentiment has been further unsettled by President Trump’s criticism of the Federal Reserve and his threats to remove Governor Lisa Cook. Concerns over political interference in monetary policy have contributed to safe-haven inflows into gold.
Other precious metals gain
Silver extended its rally to levels not seen since 2011, while platinum advanced by 1 per cent to $1,415.70 per ounce. Palladium bucked the trend, slipping 0.7 per cent to $1,129.03. The broader rise in precious metals reflects growing investor caution and portfolio diversification away from risk assets.
Implications for investors
Gold’s record-breaking run underscores heightened uncertainty in financial markets. The metal’s appeal is being driven by a convergence of factors: anticipation of lower US interest rates, dollar weakness, and fears of political influence over the Federal Reserve. Market attention will now focus on Friday’s US employment report, which could reinforce or challenge expectations of imminent monetary easing.
REFH – Newshub, 2 September 2025
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