Gold Prices Hit Record Above $3,500 on Fed Rate Cut Bets and Tariff Risks
Gold prices soared to a fresh record in Asian trading on Tuesday. Traders rushed into the yellow metal on expectations of U.S. interest rate cuts and growing uncertainty over President Donald Trump’s trade tariffs.
Silver and platinum also posted strong gains. Silver surged to a near 14-year high, while platinum hovered close to an 11-year peak. A weaker U.S. dollar, now at a five-week low, added more fuel to the metals rally.
Spot gold jumped 0.8% to an all-time high of $3,508.54 an ounce. Gold futures for December also hit $3,578.20/oz. By 01:25 ET (05:25 GMT), spot prices trimmed gains but still traded 0.5% higher at $3,494.56/oz.
Tariff Uncertainty and Fed Outlook Drive Gold
Gold’s rally came after a U.S. appeals court ruled last week that Trump’s tariffs were illegal. The court allowed tariffs to remain until mid-October, but Trump criticized the ruling and vowed to appeal to the Supreme Court.
This decision increased market uncertainty around the tariffs, which began in August. Any strike down would push Washington to renegotiate deals with key trading partners.
Meanwhile, traders are betting heavily on a Federal Reserve rate cut in September. Markets now price in nearly an 85% chance of a 25-basis-point cut, according to CME FedWatch.
Even though recent inflation data stayed sticky and above the Fed’s 2% target, Fed Chair Jerome Powell has hinted at possible easing. Lower rates weaken the dollar and typically make non-yielding assets like gold and silver more attractive.
Silver Hits 14-Year High, Platinum Near 11-Year Peak
Spot silver briefly topped $40 for the first time since 2011, before settling 0.1% higher at $40.7545/oz. Platinum gained 0.7% to $1,421.55/oz, staying close to its recent highs.
Both metals have outpaced gold in recent months. Their lower price per ounce, combined with consolidation in gold, sparked strong speculative buying.
Copper prices also rose. Investors expect more stimulus measures from China after weak PMI data. London copper futures gained 0.3% to $9,919 a ton, while COMEX copper futures advanced 0.4% to $4.5905 a pound.
