Gold Hits $3,500 Per Ounce Record on Fed Rate-Cut Bets

Gold surged past a major milestone as it hit a record high of more than 3,500 per ounce, supported by expectations of a U.S. Federal Reserve interest rate cut and a weakening dollar. Reuters reported the development on September 2, 2025, noting the safe-haven asset rose sharply ahead of the Fed’s policy meeting later this month.

Fed Interest Rate Cuts Impact on Gold

Traders are assigning a 90% probability of a 25 basis points cut at the September 17 meeting, according to CME FedWatch data. This outlook has fueled strong buying in bullion markets. Spot gold reached $3,508.50 per ounce before settling near $3,496, reflecting a year-to-date gain of about 33%.

Futures prices echoed the rally, with December contracts climbing to $3,564.40 per ounce, the highest ever recorded. Analysts point to monetary policy easing as the key driver of gold’s recent strength, alongside falling Treasury yields.

Gold Hits Record High Over $3500 Per Ounce

The surge has been supported by a softer U.S. dollar, which makes gold more attractive for international buyers. According to market data, the dollar index dropped to multi-month lows, helping bullion extend its rally.

Other precious metals also saw notable movements such as Silver crossed $40 per ounce, a level last seen in 2011. This broad rally highlights investor appetite for metals as a hedge against both inflation and political risks.

Central Banks Increase Gold Reserves at Record Prices

Central banks in countries including China, India, Turkey, and Poland continued to accumulate gold in recent months, reinforcing structural demand. Official reserves expanded as policymakers sought to diversify away from the dollar and strengthen financial buffers.

In addition to central bank purchases, exchange-traded funds (ETFs) have recorded inflows, signaling sustained institutional interest. Goldman Sachs recently projected that gold could reach $4,000 per ounce by mid-2026, citing ongoing reserve accumulation and safe-haven demand.

Gold Price Record on Fed Rate-Cut Hopes

Market attention now shifts to the upcoming U.S. non-farm payrolls report, which could influence the Fed’s policy stance. Stronger-than-expected labor data may temper the scale of cuts, while weaker data could accelerate easing.

“The last time gold hit $3,500 was during intra-day trading, so we would be keen to see if gold manages to make a daily close above that level as that could lend some momentum,” said Oversea-Chinese Banking Corp currency strategist Christopher Wong, referring to the metal’s April peak. “There is still risk of fresh geopolitical risks and policy uncertainties returning, and that would lend a kicker to gold.”

Industry Impact and Outlook

Gold prices held steady at $3,476.58 per ounce as of 11:04 a.m. London time, showing minimal movement. The dollar strengthened significantly, with the Bloomberg Dollar Spot Index rising 0.6% and on track for its largest monthly advance. Meanwhile, other precious metals declined as the stronger dollar weighed on prices, silver dropped 0.8% to $40.36 per ounce, while platinum and palladium also fell.