Spot Gold extended gains to a fresh all-time high of $3,508.50/oz. on Tuesday, propelled by rising expectations of a Federal Reserve interest rate cut this month and a broadly weaker US Dollar.
Markets are now pricing in about a 90% chance of a 25 basis point rate cut in September.
This week’s US Non-Farm Payrolls report could provide more clues on the size of the expected rate cut by the Fed.
“A corollary of the weaker economic backdrop and expectations of U.S. rate cuts is boosting precious metals,” Capital.com’s financial market analyst Kyle Rodda was quoted as saying by Reuters.
“Another factor is the festering confidence crisis in dollar assets because of U.S. President Donald Trump’s attack on Fed’s independence.”
The US Dollar Index was hovering above an over 1-month low of 97.536.
A weaker dollar makes dollar-priced Gold more appealing to international investors holding other currencies.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 33.07%.
Spot Gold was last up 0.27% on the day to trade at $3,485.87 per troy ounce.
Meanwhile, Gold futures for December delivery were last up 0.25% to trade at $3,554.60 per troy ounce.
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