Gold Hits Fresh Record High at $3,698 as US Fed Rate Cut Expectations Boost Prices

Gold prices soared to yet another all-time high on Tuesday, as investors placed strong bets on an upcoming interest rate cut by the US Federal Reserve (Fed). On September 16, 2025, the yellow metal surged to $3,698 per ounce, marking a historic peak. A weaker US dollar and rising anticipation of a dovish monetary stance further strengthened the rally.

Why Are Gold Prices Rising?

The recent rally in bullion has been largely supported by the decline in the US dollar, which slipped to its lowest level in more than seven weeks. Markets are increasingly confident that the Fed will announce a rate cut this week, a move that typically benefits gold as it does not yield interest. Lower rates reduce the opportunity cost of holding gold, making it more attractive to investors.

Alongside the rate cut decision, the Fed is also expected to release its quarterly economic and interest rate projections. All eyes are on Fed Chair Jerome Powell’s press conference, where hints about the central bank’s forward policy stance are likely to influence global markets.

Economic and Political Backdrop

Weak US labor market data, coupled with easing inflationary pressures, have fueled hopes of further rate cuts later this year. These developments are considered bullish for gold, which traditionally thrives in a low-interest environment.

Political dynamics are also adding fuel to the fire. US President Donald Trump has reportedly attempted to remove Fed Governor Lisa Cook, while White House economic advisor Stephen Miran is set to join the central bank. These moves have strengthened expectations of a more dovish Fed policy path, further supporting gold’s uptrend.

Gold Outshines Other Assets

Gold has already surged over 40% in 2025, outperforming major global assets such as the S&P 500. The precious metal has even surpassed its inflation-adjusted peak from 1980, underlining the strength of the current rally.

Several factors have contributed to this exceptional performance:

• Uncertainty in global trade and geopolitics

• Rising central bank gold purchases

• Increased inflows into gold-backed ETFs

• A broad investor shift from treasuries to gold as a safe-haven asset

According to Goldman Sachs, if just 1% of private treasury holdings shift into gold, prices could potentially climb to $5,000 per ounce in the coming years.

Other Precious Metals Move Mixed

While gold dominated the spotlight, the broader precious metals market also saw significant action. On Monday, gold rose by nearly 1%, and silver touched a 14-year high. However, by Tuesday, silver stabilized, platinum edged lower, and palladium recorded modest gains.

Outlook for Gold

The combination of monetary easing, geopolitical risks, and investor demand continues to make gold one of the most attractive assets of 2025. Analysts suggest that unless there is a sharp reversal in Fed policy or a dramatic strengthening of the dollar, gold may continue its upward trajectory in the months ahead.

With markets eagerly awaiting the Fed’s decision later this week, the yellow metal could be in for even more volatility—and possibly another record-breaking move.