Gold extended its historic rally on Wednesday, hitting a fresh all-time high as investors piled into safe-haven assets on mounting expectations of a US interest rate cut and growing concerns over the Federal Reserve’s independence.
Spot gold rose $30 to $3,560.85 an ounce, marking record closes on back-to-back days. In New York, US gold futures reached $3,627.70 per ounce, extending a seven-session winning streak. Since bouncing from a recent low of $3,311.56, gold has surged for ten consecutive days, firmly establishing a strong bullish trend.
Fed Policy and Rate-Cut Bets Fuel Rally
The rally is being driven by expectations that the Federal Reserve will cut interest rates at its September 17 meeting. According to CME Group’s FedWatch tool, traders now see a 92% probability of a 25-basis-point cut.
Fed Chair Jerome Powell has hinted at the possibility of easing, while Governor Christopher Waller reiterated support for a September cut, noting the pace of further reductions will depend on economic data.
“Gold’s rally has room to run, with short to medium-term targets around $3,600 to $3,800, and the breakout pattern suggesting $4,000 could be within reach by late first quarter next year,” said Peter Grant, senior metals strategist at Zaner Metals.
Softer US labour market data this week could reinforce those expectations. Traders are closely watching job openings, jobless claims, and Friday’s non-farm payrolls report, which could tip the scales toward a more aggressive cut if significantly weaker than forecast.
Political Pressure and Dollar Weakness
Gold’s appeal is being amplified by uncertainty over the Fed’s independence. President Donald Trump’s unprecedented attempt to remove Governor Lisa Cook has unsettled markets, with legal battles ongoing.
“Concerns over the independence of the US central bank are further undermining trust in dollar-denominated assets and pushing investors toward gold,” Heraeus Metals noted.
The US dollar has already fallen more than 9% year-to-date, lowering the cost of gold for foreign buyers and adding fuel to the rally.
Debt and Trade Risks Add to Safe-Haven Demand
Beyond Fed policy, sovereign debt concerns in Western economies and renewed trade tensions are bolstering gold’s bid. A US federal appeals court recently ruled that Trump’s global tariffs were illegally imposed, prompting the administration to fast-track a Supreme Court review.
Analysts warn that the political and legal uncertainty around tariffs could weigh on economic growth and add to market turbulence. “Gold provides a welcome respite from volatility,” said independent analyst Ross Norman, who sees near-term upside toward the $3,600–$3,900 range.
Technical Outlook: Momentum in Control
Technically, gold remains in a strong uptrend. Prices are holding well above the $3,500.20 support level and trading significantly higher than the 50-day moving average of $3,360.50, underscoring strong momentum.
Swing chart analysis points to a potential upside target of $3,879.64, with resistance building in the $3,600 zone. A confirmed break higher would reinforce the case for further gains.
Outlook
With Fed uncertainty, dollar weakness, rising sovereign debt concerns, and fresh tariff tensions, gold’s flight-to-safety momentum shows no sign of slowing. The immediate focus is on Friday’s US jobs data, but traders are already eyeing higher levels, with $3,900 emerging as the next major target.
