Gold Hits Record High Amid Fed Rate Cut Expectations

Gold prices surged to fresh record levels on Tuesday, September 2, 2025, as investors sought safe-haven assets in anticipation of Federal Reserve interest rate cuts later this month.

In early Asian trade, spot gold climbed to US$3,501.59 per ounce, surpassing its previous peak of US$3,500.10 set in April 2025. This marked a 0.14% increase from Monday’s close and underscored a broader rally in precious metals driven by global economic uncertainty.

The US dollar steadied near five-week lows against a basket of major currencies, lending additional support to bullion. Market participants have priced in an 89% probability of a 25-basis-point Fed rate reduction at the September policy meeting. However, weak upcoming US employment data could open the door to a larger 50-basis-point cut, analysts warn.

“Although a substantial 50 basis point cut in September is not the prevailing expectation, it remains a possibility if the August employment figures reveal significant weakness,” said Eric Men, Head of Investment at OCBC Bank.

Attention now turns to this week’s US non-farm payrolls report, as well as figures on job openings and private sector employment, which will shape market expectations ahead of the Fed’s September 17-18 gathering. The US inflation report for August, due on September 11, will further influence policymakers’ decisions.

Over the past month, gold has climbed 3.05% and is up 39.46% compared to the same period last year, according to Trading Economics data. Historically, gold reached an all-time high of US$3,505.32 in early September 2025.

With rate-cut expectations underpinning sentiment, the precious metal may extend its gains in the coming weeks, analysts say.