Gold hits fresh record above $3,680 as Fed rate cut bets strengthen

Gold rose to a new record high in the international market on Tuesday as traders geared up for an anticipated easing of the U.S. Federal Reserve’s monetary policy this week and looked for clues on further rate cuts this year.

Gold prices neared a fresh record of $3,700 per ounce in Asian trading, as investors remained confident of a U.S. Federal Reserve rate cut.

Concerns over the central bank’s independence further supported the bullion’s demand.

Spot Gold edged higher to $3,679.2 per ounce, after hitting a record peak of $3,689.32 in early trading.

U.S. Gold Futures for December were largely steady at $3,719.20/oz.

The bullion traded above $3,682 an ounce on Monday, after gaining for four consecutive weeks.

Investors see a quarter-point cut this week, following signs of labor market weakness. Swaps also price in at least another reduction before the end of the year, with a high probability of a third one.

The bullion jumped 1% in the previous session amid firm bets of Fed easing, surpassing record levels notched last week.

The rally was underpinned by widespread market belief that the Fed will deliver a 25-basis-point rate cut at the end of its September 16-17 meeting, its first since December.

A weaker U.S. dollar, trading near one-week lows, added further support.