Gold surpasses $3,500 for the first time on Fed rate-cut bets

Gold prices climbed to an all-time high on Tuesday, fueled by growing expectations that the U.S. Federal Reserve will cut interest rates this month and heightened concerns over the central bank’s independence.

Spot gold rose 0.9% in early Asian trading to $3,508.73 per ounce, breaking its previous record set in April. The metal has now gained more than 30% since the start of 2025, making it one of the year’s best-performing commodities.

Gold has long been viewed as a safe-haven asset during times of political and economic uncertainty, and it typically benefits from lower interest rates. Demand has been further supported this year by market volatility, geopolitical risks, and fears over political pressure on the Federal Reserve.

Silver outshines

Silver has outpaced gold, surging more than 40% year-to-date and topping $40 per ounce for the first time since 2011. Its performance reflects both safe-haven buying and rising industrial demand for clean energy technologies such as solar panels. The Silver Institute expects the market to record its fifth consecutive annual supply deficit.

Investor appetite for silver-backed ETFs has climbed for seven straight months, draining inventories in London and driving short-term borrowing costs for the metal to about 2%, well above normal levels. Washington’s decision to classify silver as a “critical mineral” has further intensified market interest.

Outlook

Levels above $3,500 represent uncharted territory for gold, and analysts see potential for further momentum if prices hold above that threshold. Market sentiment remains driven by expectations of lower U.S. interest rates, weaker economic data, persistent global uncertainty, and geopolitical risks.

Platinum gained and palladium slipped in Tuesday’s spot trading, while the Bloomberg Dollar Spot Index was little changed.