Quick overview

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Gold reached a record high as the multiyear rally in precious metals gained new momentum due to the possibility of rate cuts by the Federal Reserve and mounting worries about the central bank’s future.

Gold for immediate delivery increased by as much as 0.9 percent to $3,508.73 an ounce before reversing some gains during early London trading on Tuesday, surpassing the previous peak set in April. The precious metal is among the top-performing major commodities, having increased by over 30% this year.

Gold and its less expensive cousin, silver, have more than doubled in value over the last three years, with growing geopolitical, economic, and international trade risks driving up demand for the traditional haven assets. Investors are becoming increasingly alarmed by President Donald Trump’s attacks on the Fed this year, as worries about the central bank’s independence threaten to undermine trust in the US.

The latest run has been driven by expectations that the US central bank will do so this month after Fed Chair Jerome Powell cautiously hinted at a rate cut. The case for cuts is likely to be strengthened by a significant US jobs report this Friday, which is expected to add to indications of a more muted labor market. Because precious metals don’t pay interest to holders, this has increased their appeal.

The yellow metal posted gains of more than 2 percent, marking a strong finish last month. Buyers held this level and maintained upward momentum since last year. However, after months of consolidation, there is renewed enthusiasm for gold as we start the new week. With today’s surge, gold has reached its highest level since late April, when the upward trend paused after hitting the $3,500 mark.

This weekend’s US tariff issues highlighted why gold remains a popular haven during tough times. This year’s dollar sentiment has taken a hit amid ongoing turbulence in US policy and unclear communications.

Additionally, many investors are hesitant to stick with the dollar and US assets, especially with Trump threatening the Fed’s independence. As a result, with other factors like central banks in play, gold is becoming even more attractive. Inflation data bolstered expectations that the Fed might cut interest rates this month, and markets are also wary of new US trade uncertainties after a US court ruled last Friday that President Trump’s global tariffs were largely illegal.