Gold prices hit fresh record as Fed rate cut bets grow

SINGAPORE: Gold extended its record-breaking rally on Wednesday, with investors piling into the precious metal as market jitters and growing expectations of a US interest rate cut drove demand.

Spot gold in international markets was trading at $3,537 per ounce at 0145 GMT, up 0.1 percent after touching a fresh high of $3,546.99 earlier in the session. US gold futures for December delivery also climbed, gaining 0.3 percent to $3,602.50.

Uncertainty fuels demand

The surge comes at a time of heightened market uncertainty. US President Donald Trump’s administration said it would seek a fast-track ruling from the Supreme Court on tariffs recently declared illegal by a lower court. Analysts say the case has cast a shadow over global trade and could reshape the economic outlook.

“The Supreme Court decision has introduced a lot of uncertainty into the market. If these rulings do not go the president’s way, the macro landscape could change drastically,” said Ilya Spivak, head of global macro at Tastylive.

Adding to the turmoil, Trump has intensified his pressure on the Federal Reserve to slash borrowing costs. He has even spoken of firing Fed Chair Jerome Powell and recently attempted to remove Fed Governor Lisa Cook, sparking a legal battle over the central bank’s independence.

According to CME Group’s FedWatch tool, traders are betting on a 92 percent chance that the Fed will cut rates by 25 basis points at its September 17 policy meeting. Lower rates typically favour gold, which does not yield interest but gains appeal when borrowing costs fall.

Global and local trends

Investor appetite was also reflected in flows into exchange-traded funds. SPDR Gold Trust, the world’s largest gold-backed ETF, reported a 1.32 percent rise in holdings to 990.56 tonnes on Tuesday, the highest level since August 2022.

Other precious metals saw mixed moves. Spot silver slipped 0.2 percent to $40.82 per ounce after touching its strongest level in more than a decade. Platinum gained 0.4 percent to $1,409, while palladium rose 0.7 percent to $1,142.77.

In Pakistan, gold prices steadied on Tuesday after setting a new record at the start of the week. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold per tola held at Rs370,700, while the price of 10 grammes stood unchanged at Rs317,815.

Market watchers now await Friday’s release of US non-farm payrolls data, which could shape the scale of the Fed’s upcoming move.

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