Gold climbed to a new all-time high on Tuesday, propelled by expectations of US Federal Reserve interest-rate cuts and mounting unease over the central bank’s future direction, extending a years-long rally in precious metals.
Spot bullion jumped as much as 0.9% to breach $3,508 an ounce, overtaking the previous peak set in April before trimming some of the gains. Prices have surged more than 30% so far this year, cementing gold’s place among the best-performing major commodities.
The latest upswing comes as investors anticipate that the Fed could reduce borrowing costs as early as this month, following Chair Jerome Powell’s cautious signals of flexibility. Friday’s upcoming US jobs report may reinforce evidence of a cooling labor market, strengthening the case for policy easing. Lower rates typically increase the appeal of assets like gold that don’t generate interest.
“Investors are building positions in gold as Fed rate cuts loom, and that’s pushing the market higher,” said Joni Teves, strategist at UBS Group AG. “We expect gold to keep setting fresh records in the quarters ahead, supported by softer economic data, declining rates, and persistent geopolitical and macroeconomic risks.”
Both gold and silver prices have more than doubled over the past three years as rising global uncertainties — from politics to trade to financial stability — have spurred demand for safe-haven assets. Investor anxiety has deepened this year amid President Donald Trump’s escalating clashes with the Fed, fueling concerns over the institution’s independence and credibility.
Markets are also watching closely as courts weigh Trump’s attempt to dismiss Fed Governor Lisa Cook. A ruling in his favor could allow him to appoint a more dovish policymaker. Meanwhile, a federal appeals court recently struck down Trump’s global tariffs as unlawfully imposed, compounding uncertainty for US businesses and casting doubt on promised economic gains.
“The key question is whether gold can achieve a daily close above $3,500, which could add further momentum,” said Christopher Wong, currency strategist at Oversea-Chinese Banking Corp. “Lingering policy and geopolitical risks remain potential catalysts for additional upside.”
As Gold Hits New Highs, What’s the Message for Equity and Bond Markets?
Silver has outpaced gold this year, soaring more than 40% and breaking above $40 an ounce for the first time since 2011. Beyond its role as a haven, silver’s industrial demand — particularly in solar and other green technologies — is contributing to its rally. The Silver Institute projects a fifth consecutive annual supply deficit, underscoring tightening market conditions.
Exchange-traded funds backed by silver have attracted fresh inflows for seven straight months, further draining inventories in London. The squeeze has kept lease rates elevated near 2%, far above their usual levels close to zero.
As of 7:53 a.m. in London, spot gold was up 0.3% at $3,484.61 an ounce, while silver was little changed at $40.6744. The Bloomberg Dollar Spot Index edged 0.1% higher. Platinum also advanced, while palladium traded softer.