Gold hits record high around $3,500 amid rate-cut bets

September 02, 2025 (MLN): Gold prices surged to a fresh record on Tuesday, as mounting expectations of imminent US interest rate cuts and growing political pressure on the Federal Reserve fuelled a rush into safe-haven assets.

Spot gold extended its winning streak to a sixth consecutive session, it was up 0.99% at $3,481.31 an ounce as of [12:38 pm] PST, according to data reported by Mettis Global.

US gold advanced 1.4% to $3,564.40 an ounce.

According to the CME FedWatch tool, traders now assign an 89.7% probability that the Federal Reserve will cut its benchmark rate by 25 basis points at its September 17 meeting.

Lower rates reduce the appeal of yield-bearing assets relative to bullion, making gold more attractive for investors.

The rally comes against a backdrop of months of steady gains, supported by persistent inflation pressures, global market volatility, and heightened geopolitical tensions.

Fresh momentum was added by fears over political interference in US monetary policy.

European Central Bank president Christine Lagarde warned that US President Donald Trump could inflict “very serious” damage on the global economy if he attempted to dismiss Fed chair Jerome Powell or governor Lisa Cook.

Trump has repeatedly criticized the Fed’s policy approach, demanded sharper rate cuts and questioned its strategy on inflation.

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