Gold Hits Record Highs Amid Fed Rate Cut Expectations and Dollar Weakness
Gold prices surged to an all-time high on Tuesday, extending gains for a sixth consecutive session as a weaker U.S. dollar and growing expectations of an interest rate cut by the Federal Reserve this month fueled demand for the precious metal.
Spot gold rose 0.5% to $3,492.26 per ounce, after earlier touching a record peak of $3,508.50. U.S. gold futures for December delivery climbed 1.4% to $3,563.40 per ounce.
The rally is driven by a combination of slowing economic momentum in the United States and mounting pressure on the Federal Reserve to ease monetary policy. Concerns over the central bank’s independence have further weighed on confidence in dollar-denominated assets, adding support to gold’s upward trajectory.
The U.S. dollar, meanwhile, hovered near its lowest level in over a month against major peers, making gold more attractive to international buyers. Market indicators now show a 90% probability of a 25-basis-point rate cut at the Fed’s upcoming meeting on September 17, reinforcing gold’s appeal in a low-interest-rate environment where the non-yielding asset becomes more competitive.
Recent U.S. data showed the Personal Consumption Expenditures (PCE) price index rising 0.2% month-on-month and 2.6% year-on-year, in line with forecasts. Investors are now closely watching the release of non-farm payrolls on Friday, which could further shape expectations for the Fed’s next move.
Among other precious metals, silver fell 1.5% to $40.61 per ounce after hitting its highest level since September 2011 in the previous session. Platinum gained 1.6% to $1,417.16, while palladium slipped 0.9% to $1,126.63.
