On September 3, gold reached a new all-time high above $3,500, driven by expectations of an imminent Federal Reserve rate cut, ongoing political and economic uncertainties, and a weaker US dollar. The spot gold price climbed 0.1% to $3,534.88 per ounce, touching a peak of $3,546.99 during the day. Similarly, December delivery of US gold futures rose by 0.3% to $3,602.80.
The market was further rattled by the Trump administration's decision to seek an expedited tariff ruling from the Supreme Court following a recent appeals court decision that found the current tariffs illegal. This move raises concerns about global trade tensions and adds to the prevailing market instability, prompting investors to turn to gold as a safe haven.
Independent analysts like Ross Norman believe that regardless of the outcome of the tariff issue, gold remains a valuable asset for investors looking for stability amid turbulent times. With the likelihood of a Fed rate cut increasing, lower rates could stimulate economic activity, weaken the dollar, and provide a strong boost to gold prices.
President Trump's persistent pressure on the Federal Reserve to lower interest rates has raised questions about the central bank's independence, weighing on the US dollar. Investors are now expecting a 25-basis-point rate cut by the Fed on September 17, with a 92% probability according to CME Group's FedWatch tool. This anticipation, combined with geopolitical risks and the Fed's outlook, suggests that the gold rally might continue into 2025.
Looking ahead, analysts predict gold to remain in the $3,600-$3,900 range in the short to medium term, with a potential to reach $4,000 in 2026 if economic and geopolitical uncertainties persist. Meanwhile, silver eased slightly to $40.81 per ounce, platinum fell to $1,401.28, and palladium rose to $1,140.66.
All eyes are now on the upcoming US non-farm payrolls data release on Friday, which could offer insights into the Fed's planned rate cut. Despite fluctuations in the precious metals market, the prevailing sentiment points towards continued interest in gold as a reliable investment option in the face of uncertain global economic conditions.
