Gold surged to fresh record highs on Tuesday as mounting expectations of US interest rate cuts and concerns over the Federal Reserve’s independence boosted demand for safe-haven assets.
Spot gold hit $3,530 per ounce, breaking through its previous all-time peak of $3,500.05 set in late April. After starting the session just below $3,500, bullion quickly advanced, recording gains of more than 1.5%.
In New York, gold futures also reached a new high of $3,590.40 an ounce, as investors priced in the likelihood of the Fed pivoting to monetary easing for the first time in nine months. Fed Chair Jerome Powell’s recent comments have been interpreted as a cautious signal that a rate cut is on the horizon.
Analysts Turn More Bullish
“Investors adding to gold allocations, especially as Fed rate cuts loom, are pushing prices higher,” said Joni Teves, strategist at UBS Group AG. “Our base case is that gold continues to make new highs over the coming quarters.”
Suki Cooper of Standard Chartered Bank highlighted seasonal and policy drivers: “The gold market is entering a seasonally strong period for consumption, coupled with expectations for a rate cut at the September Fed meeting. We forecast gold to average $3,500 in Q3 2025 and $3,700 in Q4 2025.”
Political and Geopolitical Pressures
Gold has more than doubled in the past three years as geopolitical and economic risks fuelled persistent safe-haven demand. In 2025 alone, prices are already up over 30%, with trade tensions and policy uncertainty under US President Donald Trump adding further momentum.
Markets remain uneasy about repeated attacks on the Federal Reserve from the White House. Investors are closely watching a pending ruling on whether Trump can legally dismiss Fed Governor Lisa Cook. A successful challenge would raise fears of increased political interference in monetary policy.
Commerzbank noted: “The accusations against Cook are a clear warning to other FOMC members to bow to government pressure for substantial rate cuts. This makes gold investments more attractive in such an environment.”
Adding to the uncertainty, a US federal appeals court ruled that Trump’s global tariffs were illegally imposed under emergency powers, clouding the outlook for American trade policy and growth.
Focus on Jobs Data and Fed Meeting
Markets are now awaiting Friday’s nonfarm payrolls (NFP) report, which could influence expectations for the size of September’s Fed rate cut.
Zain Vawda, analyst at OANDA’s MarketPulse, commented: “A weak NFP print this week could reignite the conversation around the possibility of a 50bps rate cut. I don’t think this will happen, but even the speculation could fuel the gold rally.”
According to the CME FedWatch tool, markets are already pricing in a 90% chance of a 25bps cut at the Fed’s September 17 meeting.
With the combination of softer economic data, political tensions, and the prospect of easier monetary policy, gold’s appeal as a hedge against uncertainty is stronger than ever. Analysts agree that the record-breaking rally may only be the beginning, with more highs likely in the months ahead.
