Gold Breaks Records as Fed Easing Fuels Investor Demand
Gold surged to fresh all-time highs on Monday, driven by mounting expectations of further Federal Reserve rate cuts and sustained global demand for the metal as a safe-haven asset.
Fed Easing Sparks Rally
The latest surge follows last week’s U.S. interest rate cut and signals from the Fed that more easing could come before year-end.
- Gold futures climbed 1.1% to $3,745.90 per ounce.
- Spot gold gained 0.6% to $3,709.41, after briefly touching a record $3,721.08 earlier in the session.
The move caps a strong month for bullion, which has advanced 10% in just four weeks.
“Traders are clearly focusing on the upside potential,” said Tim Waterer, Chief Market Analyst at KCM Trade. “Projected Fed cuts, coupled with ongoing central bank buying, continue to fuel gold’s momentum.”
Inflation Data and Fed Outlook in Focus
Markets now turn to the upcoming release of the core Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — due Friday.
Additionally, speeches from more than a dozen Fed officials, including Chair Jerome Powell, could provide further guidance on the pace and scale of easing.
Broader Drivers: Debt, Geopolitics, and Central Banks
Beyond monetary policy, gold has gained 40% over the past year, supported by several key factors:
- Geopolitical tensions continue to drive safe-haven demand.
- Rising government debt has heightened concerns about currency debasement.
- Central bank accumulation remains strong, with steady purchases adding structural support.
Currency Dynamics: Dollar Weakness Lifts Gold
According to Rick Kanda, Managing Director at The Gold Bullion Company, currency movements play a critical role in shaping gold’s performance.
“If the U.S. dollar strengthens against the pound, UK gold prices climb while U.S. gold prices typically ease. The reverse occurs if the dollar weakens,” he explained.
In 2025, the dollar depreciated 11%, while U.S. gold prices soared over 25%. In the UK, gold gained 14% in the first half of the year and another 11% since July.
Kanda warned, however, that tariff and trade policy uncertainties could inject volatility into the market. “If these policies don’t push the pound lower, it could present an attractive entry point for UK investors,” he added.
All Eyes on Fed and Global Risks
As gold consolidates above $3,700, its short-term direction will depend on signals from the Fed and U.S. inflation data. In the long term, sustained geopolitical risks, shifting currencies, and strong central bank demand point to potential further gains.
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