Gold prices surged to new highs in Asian trade on Tuesday, approaching $3,700 per ounce, fueled by expectations of a Federal Reserve interest rate cut later this week. Investor confidence in the metal was also boosted by concerns surrounding the Fed’s independence, which strengthened gold’s appeal as a safe-haven asset.
Spot gold ticked up 0.1% to $3,681.20 per ounce by 01:42 ET (05:42 GMT), after briefly touching a record $3,689.32 in early trading. December U.S. gold futures remained largely unchanged at $3,718.20 per ounce. The precious metal gained roughly 1% in the previous session, surpassing last week’s record levels.
Fed Rate Cut Expectations Drive Bullion Rally
The recent gold rally is largely attributed to broad market expectations that the Fed will implement a 25-basis-point rate reduction at the conclusion of its September 16–17 meeting—the first since December 2024. A weaker U.S. dollar, trading near one-week lows, provided additional support for bullion.
Political developments in Washington have also contributed to gold’s strength. The U.S. Senate confirmed Stephen Miran, a former economic adviser to President Trump, to the Fed Board of Governors, raising expectations that the central bank may face increased pressure to align with White House priorities. Meanwhile, a U.S. appeals court blocked Trump’s effort to remove Fed Governor Lisa Cook, who is now likely to participate in this week’s Fed meeting, with the president expected to appeal to the Supreme Court.
Other Metals Show Mixed Movements Amid Trade Talks
Silver futures remained largely steady at $42.95 per ounce, while platinum futures fell 0.6% to $1,410.45 per ounce. Copper retreated from recent peaks, with London Metal Exchange benchmark copper down 0.5% at $10,111.60 per ton, following a 15-month high of $10,192 per ton in the prior session. On the U.S. Comex, copper fell 0.7% to $4.69 per pound.
U.S. and Chinese officials resumed trade discussions in Madrid, led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, with Vice Premier He Lifeng and negotiator Li Chenggang representing China. The talks produced a framework agreement regarding the U.S. ownership of TikTok, with Presidents Donald Trump and Xi Jinping expected to finalize details later this week. Analysts note that easing tensions between the world’s two largest economies could provide support to industrial metals.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply