Gold Price Hits Record High Above $3,690 on Fed Rate Cut Hopes
Weakening US economic data and rising geopolitical tensions fuel a flight to safety, pushing the precious metal to historic levels.
Gold prices surged to a new all-time high on Tuesday, with spot gold touching $3,673.49 per ounce and US futures peaking at $3,715.20. The rally, which marks a nearly 40% gain year-to-date, is primarily driven by mounting expectations that the Federal Reserve will soon begin cutting interest rates in response to a slowing US economy.
The precious metal's ascent has been fueled by a confluence of factors that enhance its appeal as a safe-haven asset. Recent economic data has hinted at a slowdown, leading traders to price in a high probability of a Fed rate cut, possibly as early as next week's FOMC meeting. , making it more attractive to investors. "This rally is largely driven by expectations that the Federal Reserve will begin cutting rates, potentially as early as September," said Bart Melek, head of commodity strategies at TD Securities.
Beyond monetary policy, a landscape of global instability is bolstering gold's status as the ultimate store of value. Persistent geopolitical risks, including the protracted conflict in Eastern Europe and tensions in the Middle East, have prompted central banks to diversify their reserves, moving away from the dollar and into gold. , free from the direct influence of any single government.
The price action has been global, with gold prices in major markets like India also reaching unprecedented highs. , reflecting the widespread demand. Investors are now closely watching upcoming US inflation data for further cues, but analysts remain bullish. "We’re very bullish even at $3,600," commented John Ciampaglia, CEO of Sprott Asset Management. "We think the markets will continue to rally because we don’t see a shift that’s going to happen with respect to tariff policy, trade relations or geopolitics."