Gold Hits Record High Above $3,720 as Fed Rate Cut Bets Fuel Rally

Key Insights

• Gold hits record high above $3,720 amid growing market enthusiasm over Fed Rate Cuts.

• Silver surged 1.3% to $43.64 per ounce, reaching its highest level in more than 14 years.

Gold Hits Record High

Gold prices have surged to fresh record highs, climbing as much as $3,719.65 per ounce on Monday before easing slightly to trade near $3,716. The rally, which has pushed bull run up almost 8% this month and more than 40% so far this year, is being powered by growing investor confidence that the U.S. Federal Reserve will continue cutting interest rates in the months ahead.

Source: Tradingview

At the time of writing, spot gold hovered around $3,709 per ounce, while U.S. gold futures for December delivery were trading at $3,751.20. Analysts suggest the metal could test resistance levels between $3,719 and $3,739 in the near term.

Fed Cuts and Inflation Data in Focus

Last week, the Fed delivered its first interest rate cut since December, trimming rates by 25 basis points. Markets are now betting on two more cuts this year, one in October and another in December, with probabilities of 93% and 81% respectively, according to CME’s FedWatch tool.

Investors are eagerly awaiting fresh inflation data, particularly the U.S. core Personal Consumption Expenditures (PCE) index due Friday, which is the Fed’s preferred measure of inflation. At least a dozen Fed officials, including Chair Jerome Powell, are also scheduled to speak this week. Any signals of further easing could provide fresh momentum for Gold.

UBS analyst Giovanni Staunovo noted that while central bank and Asian demand had been key drivers of Gold’s rally, Western investors are now increasingly moving into Gold through ETFs. This shift reflects growing expectations of a prolonged cycle of rate cuts.

Silver and Other Precious Metals Join the Rally

Gold’s rally has also lifted other precious metals. Silver surged 1.3% to $43.64 per ounce, reaching its highest level in more than 14 years. Platinum gained 1.1% to $1,419.65, while palladium climbed 1.1% to $1,161.85.

The synchronised gains underscore a broader shift by investors into safe-haven assets amid global economic uncertainty and rising government debt.

Dollar Weakness Adds Support

Gold’s performance is also tied to the U.S. dollar, which has depreciated by 11% in 2025. A weaker dollar makes Gold cheaper for international buyers, further boosting demand. Rick Kanda of The Gold Bullion Company explained that shifts in the dollar’s value directly influence gold prices across different currencies. For example, while U.S. gold prices surged by more than 25% this year, UK gold prices rose 14% in the first half of the year and an additional 11% since July.

Source: Tradingview

This dollar dynamic, coupled with ongoing geopolitical tensions and trade uncertainties, has helped reinforce Gold’s role as a global hedge.

Could Gold Reach $3,900?

Looking ahead, analysts remain optimistic. UBS projects Gold could climb to $3,900 by mid-2026, supported by continued monetary easing, central bank demand, and investor inflows. KCM Trade’s Tim Waterer echoed this bullish outlook, noting that traders are increasingly focused on Gold’s upside potential between now and year-end.

With inflation data and Fed commentary on the horizon, volatility is expected, but the long-term trend remains firmly upward. As global uncertainty persists, Gold’s status as a safe-haven asset appears stronger than ever.

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