Gold soared to a new all-time high on Tuesday, driven by growing expectations of U.S. interest rate cuts and renewed concerns about the Federal Reserve’s stability and the country’s ballooning debt.
Spot gold climbed as much as 1.1% to reach $3,516 per ounce, surpassing its previous record set in April. The rally came amid a wave of risk aversion sweeping financial markets — with equities falling and bond yields rising as fiscal anxieties reemerged across developed economies.
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So far this year, gold has surged over 30%, cementing its position as one of the top-performing major commodities. The latest gains have been fueled by rising bets that the Federal Reserve could start lowering rates as early as this month, following recent signals from Fed Chair Jerome Powell suggesting openness to policy easing. A closely watched U.S. jobs report due Friday is expected to further highlight labor market weakness, strengthening the case for a rate cut.
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“Investors adding to gold allocations, especially as Fed rate cuts loom, are pushing prices higher,” said Joni Teves, strategist at UBS Group AG. “Our base case is that gold continues to make new highs over the coming quarters. A lower interest rate environment, softer economic data and continued elevated macro uncertainty and geopolitical risks boost gold’s role as a portfolio diversifier.”
Both gold and silver have more than doubled over the past three years, fueled by escalating concerns over geopolitics, trade tensions, and global economic instability. Safe-haven demand has intensified further this year amid increasing political pressure on the Federal Reserve.
Investor nerves have been rattled by President Donald Trump’s intensified criticism of the Fed, with fears growing over the central bank’s independence. Markets are closely watching an upcoming legal ruling that will determine whether Trump can legally remove Fed Governor Lisa Cook — a move that, if allowed, would enable him to appoint a more dovish replacement.
Adding to the uncertainty, a federal appeals court ruled Friday that Trump’s global tariffs were unlawfully enacted under emergency powers, casting fresh doubt on the administration’s trade policies and their promised economic benefits.
Altogether, the mix of policy uncertainty, economic fragility, and geopolitical risk continues to drive investor demand for gold as a long-trusted safe haven.
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