Gold prices soared to an all-time high on Tuesday (Sep 2), driven by expectations of a U.S. Federal Reserve rate cut and a weaker dollar, which boosted demand for the precious metal.
Spot gold climbed 0.3 per cent to US$3,487.55 per ounce as of 6.33am GMT (2.33pm Singapore time), after touching a record US$3,508.50 earlier in the session. U.S. gold futures for December delivery rose 1.2 per cent to US$3,557.80. So far in 2025, bullion has rallied 32 per cent.
“A weaker economic backdrop and expectations of U.S. rate cuts are boosting precious metals,” said Kyle Rodda, analyst at Capital.com. He added that a “confidence crisis in dollar assets” stemming from President Donald Trump’s criticism of the Fed has further lifted gold.
Trump has repeatedly attacked Fed Chair Jerome Powell for not cutting rates and recently criticized a costly renovation of the central bank’s Washington headquarters. He also defended his decision to fire Fed Governor Lisa Cook over alleged mortgage fraud, sparking debate over the central bank’s independence.
Markets are pricing in a 90 per cent chance of a 25-basis-point Fed rate cut on Sept 17, according to the CME FedWatch tool. Gold, which yields no interest, tends to benefit in low-rate environments.
Analysts say gold’s 2025 rally—fueled by central bank buying, geopolitical uncertainty, and global moves away from the U.S. dollar—could extend further. “Gold’s rally could extend to US$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,” said Tim Waterer, chief market analyst at KCM Trade.
Spot silver traded flat at US$40.64 per ounce, near its highest since 2011. Platinum rose 1 per cent to US$1,412.95, while palladium slipped 0.7 per cent to US$1,129.52.
