Gold Surges to Record High as Dollar Weakens and Fed Cut Looms

New York, September 2, 2025 - Gold prices vaulted to an unprecedented peak Tuesday, with bullion hitting $3,508.50 per ounce, driven by a softer U.S. dollar and mounting optimism for an imminent Federal Reserve interest rate reduction.

A combination of growing confidence that the Fed will ease monetary policy this month and concerns over the dollar’s outlook has fueled demand for the safe-haven metal. Markets now assign a roughly 90% probability to a 25-basis-point cut at the Fed’s September 17 meeting, according to the CME FedWatch Tool.

Kyle Rodda, market analyst at Capital.com, remarked that “the weakening economic backdrop and anticipation of U.S. rate cuts are heightening the appeal of precious metals,” adding that recent political pressure on the Fed has further eroded confidence in dollar-denominated assets.

U.S. President Donald Trump’s public rebukes of Fed Chair Jerome Powell over both policy stances and unrelated controversies have intensified scrutiny of central bank independence. Treasury Secretary Scott Bessent also weighed in, acknowledging Fed mistakes while defending the institution’s autonomy, even as he endorsed Trump’s right to remove Fed Governor Lisa Cook.

Against this backdrop, the dollar hovered near a one-month trough, rendering gold more affordable for overseas buyers. Central banks’ continued diversification away from dollar reserves and persistent geopolitical and trade tensions have added fresh impetus to gold’s climb. For the year to date, bullion has amassed gains exceeding 30%.

Silver held near $40.64 per ounce, trading close to a 14-year peak reached in the previous session. Investors are now eyeing this week’s U.S. nonfarm payroll report for further clues on the Fed’s policy trajectory.