The price of gold surged sharply on Wednesday, reaching a new record of $3,530.08 per ounce. Analysts say the rise is driven by expectations of a U.S. Federal Reserve (Fed) rate cut in September and concerns over the central bank’s independence.
By 17:30 GMT, gold stood at $3,528.80 per ounce and currently trades around $3,526.80.
Gold had already hit record levels earlier this year, surpassing $3,500 amid global trade tensions sparked by U.S. tariffs. The “safe-haven” metal has gained more than 33% so far this year.
Prices had stabilised around $3,400 as trade fears eased, but renewed expectations of a Fed rate cut for the September meeting have lifted demand once again.
The Fed is set to announce its interest rate decision later this month. Money markets assign an 88% probability of a rate cut, with two cuts expected by the end of the year. Inflation in July fell below expectations and employment growth slowed, prompting markets to anticipate a 25 basis-point reduction in September. The current policy rate stands at 4.25%-4.5%.
At the Jackson Hole symposium in mid-August, Fed Chair Jerome Powell signalled a possible rate cut, saying the central bank’s policy stance “may warrant adjustment” given shifting risks.
In addition, President Donald Trump’s move to remove Fed Governor Lisa Cook has added to gold’s appeal, raising concerns over the Fed’s independence.
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