Gold hits record high as US rate-cut hopes, softer dollar boost appeal
Gold prices climbed to an all-time high on Tuesday, extending gains to a sixth session on the back of a weaker dollar and rising bets of a U.S. interest rate cut this month.
Spot gold was up 0.5% at $3,493.99 per ounce, as of 0348 GMT, after hitting a record high of $3,508.50 earlier in the session. U.S. gold futures for December delivery gained 1.4% to $3,564.40.
"A corollary of the weaker economic backdrop and expectations of U.S. rate cuts is boosting precious metals," said Kyle Rodda, Capital.com's financial market analyst.
"Another factor is the festering confidence crisis in dollar assets because of U.S. President Donald Trump's attack on Fed independence."
Trump has criticised the Federal Reserve and its chair, Jerome Powell, for months for not lowering rates, and recently took aim at Powell over a costly renovation of the central bank's Washington headquarters.
On Monday, Treasury Secretary Scott Bessent said the Fed is and should be independent but added that it had "made a lot of mistakes" and defended Trump's right to fire Fed Governor Lisa Cook over allegations of mortgage fraud.
Traders are currently pricing in a 90% chance of a 25-basis-point Fed rate cut on September 17, according to the CME FedWatch tool.
Non-yielding gold typically performs well in a low-interest-rate environment.
Rate-cut expectations and worries over the Fed's independence have weighed on the U.S. dollar, which is languishing near a more than one-month low against its rivals, making gold less expensive for overseas buyers. [USD/]
Data on Friday showed that the U.S. personal consumption expenditures price index rose 0.2% month-on-month and 2.6% year-on-year, both in line with expectations.
Investors are now looking forward to the U.S. non-farm payrolls data due on Friday to determine the size of an expected Fed rate cut later this month.
Elsewhere, spot silver gained 0.1% to $40.71 per ounce, after hitting its highest since September 2011 in the previous session.
Platinum gained 1% to $1,415.70 and palladium fell 0.7% to $1,129.03.
