Gold Surges to Record High Above $3,500 Amid Rate Cut Speculation

Gold prices soared to an all-time high of over $3,500 per ounce on September 2, 2025, driven by a weaker US dollar and increasing expectations of an interest rate cut by the United States Federal Reserve. The spot price of gold reached $3,508.50 earlier in the session before settling at $3,487.55 per ounce, marking a 32 percent increase in value for the year. Meanwhile, US gold futures for December delivery rose by 1.2 percent to $3,557.80.

Analysts attribute the surge in gold prices to several factors, including the deteriorating economic outlook and anticipated rate cuts. According to Kyle Rodda, a financial market analyst at Capital.com, “A corollary of the weaker economic backdrop and expectations of US rate cuts is boosting precious metals.” Additionally, concerns over the independence of the Federal Reserve have contributed to a crisis of confidence in dollar assets, fueled by ongoing criticism from President Donald Trump.

Trump has publicly criticized the Fed and its chair, Jerome Powell, for not lowering rates and recently targeted Powell over a costly renovation project at the central bank’s Washington headquarters. On Monday, Treasury Secretary Scott Bessent expressed that while the Fed should maintain its independence, it has “made a lot of mistakes,” and defended Trump’s right to dismiss Fed Governor Lisa Cook over allegations of mortgage fraud.

Market participants are currently pricing in a 90 percent likelihood of a 25-basis-point rate cut during the Fed’s upcoming meeting on September 17, according to the CME FedWatch tool. Gold, a non-yielding asset, tends to perform well in low-interest-rate environments, which further enhances its appeal to investors.

The decline of the US dollar, which is nearing a one-month low against other currencies, has made gold less expensive for international buyers. Gold has traditionally served as a reliable hedge against geopolitical and economic instability, and recent trends have affirmed that role. The precious metal has enjoyed multiple record highs throughout 2025, bolstered by continued central bank purchases and a shift away from the dollar. Analysts believe strong demand for safe-haven assets, combined with geopolitical uncertainties, has driven gold prices up significantly.

In 2024, spot gold prices surged 27 percent, breaching the $3,000 per ounce mark for the first time in March. This was largely attributed to uncertainty surrounding Trump’s trade policies, prompting many investors to turn to gold as a safe investment.

Looking ahead, Tim Waterer, chief market analyst at KCM Trade, suggested that gold could reach $3,600 or more by the end of the year if the Fed implements multiple rate cuts and if tensions in the Russia-Ukraine conflict persist.

As investors await the US nonfarm payrolls data scheduled for release on Friday, they will be closely assessing the potential impact on the Fed’s rate cut strategy later this month. In addition to gold, other precious metals also experienced movements, with spot silver remaining stable at $40.64 per ounce after recently reaching its highest price since September 2011. Platinum prices increased by 1 percent to $1,412.95, while palladium saw a slight decline of 0.7 percent, settling at $1,129.52.