Gold price hits a new record high on a weaker dollar and expectations of a US interest rate cut

Gold sailed past $3,500 per ounce to a record high Tuesday, as a weaker dollar and mounting expectations of a Federal Reserve interest rate cut in September boosted the precious metal’s appeal. The price of gold hit $3,508.50 per ounce. Bullion has gained more than 30% so far this year. “A corollary of the weaker economic backdrop and expectations of US rate cuts is boosting precious metals,” Capital.com financial market analyst Kyle Rodda said. “Another factor is the festering confidence crisis in dollar assets because of US President Donald Trump’s attack on Fed’s independence.” Trump has criticized the Fed and its chair, Jerome Powell, for months for not lowering rates and recently took aim at Powell over a costly renovation of the central bank’s Washington headquarters. On Monday, Treasury Secretary Scott Bessent told Reuters the Fed is and should be independent but added that it had “made a lot of mistakes” and defended Trump’s right to fire Fed Governor Lisa Cook overallegations of mortgage fraud. Traders are currently pricing in a 90% chance of a quarter-of-a-percentage-point Fed rate cut on September 17, according to the CME FedWatch tool. Non-yielding gold typically performs well in a low-interest-rate environment. Rate-cut expectationsand worries over the Fed’s independence have weighed on the US dollar, which is languishing near a more than one-month low against its rivals, making gold less expensive for overseas buyers. What happens if Trump gets control of the Fed? Warnings from history for the US and beyond Long regarded as a dependable hedge against geopolitical and economic turmoil, gold has rallied to multiple record highs in 2025, drawing support from ongoing buying by central banks amid a move away from the US dollar, strong safe-haven demand in light of geopolitical and trade uncertainty, plus broad dollar weakness, analysts say. Gold prices rose 27% in 2024 and broke the $3,000 per ounce level for the first time in March this year as uncertainty around Trump’s trade policies sent investors flocking to the safe-haven asset. “Gold’s rally could extend to $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,” KCM Trade chief market analyst Tim Waterer said. Investors are now looking forward to the US nonfarm payrolls data due Friday to determine the size of an expected Fed rate cut later this month. The price of silver was little changed at $40.64 per ounce, after hitting its highest since September 2011 in the previous session.