Gold Price Hits New Record as Fed Rate Cut Expectations Surge

Gold Price Surges Amid Fed Rate Cut Speculation

Gold prices climbed above $3,600 per ounce for the first time on Monday, setting a new record. The surge followed weaker US jobs data, which solidified expectations of a Federal Reserve interest rate cut this month. Spot gold peaked at $3,636.71 earlier before slightly retreating, while US gold futures rose modestly to around $3,676 per ounce. This momentum built on Friday’s payroll report, which showed slower hiring and a rise in unemployment to its highest level since 2021.

Investors now price in an 88% chance of a 25-basis-point cut at the Fed’s September 16-17 meeting. Market sentiment also suggests up to three rate reductions throughout 2025, which benefits gold as it yields no interest. UBS analyst Giovanni Staunovo forecasts gold reaching $3,700 per ounce by mid-next year. Meanwhile, Swissquote analyst Carlo Alberto De Casa highlights geopolitical uncertainties and central bank purchases as additional drivers.

Factors Driving the Record Gold Price

The gold price rally, up 38% in 2025 after a 27% gain in 2024, stems from multiple factors. A weaker US dollar, strong central bank buying, and a dovish monetary policy outlook all underpin the bullish trend. Geopolitical and economic uncertainty further fuels demand. Upcoming US data releases—including revisions to jobs numbers and inflation reports—will test the durability of rate cut hopes.

Adding complexity, a landmark ruling on US President Trump’s attempt to remove Fed Governor Lisa Cook could impact Fed independence and future monetary policy. Goldman Sachs analysts suggest gold might surge near $5,000 if the Fed’s independence weakens and investors shift funds from Treasuries to bullion. Additionally, Trump recently exempted gold from global tariffs, reducing trade-related risks for the metal.

SuperMetalPrice Commentary:

Gold’s new record highlights its role as a safe haven amid monetary and geopolitical uncertainty. The anticipated Fed rate cuts will likely sustain demand, especially as gold offers a hedge against inflation and currency volatility. Investors should watch upcoming US economic data closely, as they will influence both rate cut probabilities and gold’s near-term trajectory. Central bank buying and geopolitical tensions remain critical to the metal’s strength in 2025 and beyond.