Record Gold Price Surges Above £3,500 Pounds as Investors Brace for Fed Rate Cut

Gold soared to an unprecedented high this week, breaking through the $3,500 per ounce barrier as investors responded to mounting speculation of a US Federal Reserve interest rate reduction later this month. Market volatility and worries over a protracted tariff dispute have prompted a flight to safe haven assets, with the precious metal ending Tuesday at $3,549.40 an ounce—a 2.2 percent daily gain and its strongest session in three months. This remarkable rally has seen gold rise 35 percent since the start of the year.

Viewed as a reliable refuge during economic turmoil, gold’s surge reflects both immediate and long term anxieties in financial markets. Suki Cooper, a leading precious metals analyst at Standard Chartered Bank, noted that the market is entering a period of robust seasonal consumption, augmented by the growing expectation of lower interest rates at the September Fed meeting. “We continue to expect new record highs,” Cooper observed, as traders currently put the probability of a quarter point rate cut at 91.7 percent according to CME FedWatch data.

Lower interest rates typically favour nonyielding assets like gold, and the current record breaking run has been further fuelled by sustained central bank buying, strategic moves to diversify away from the US dollar, and ongoing safe haven demand amid geopolitical instability and trade tensions. The past year has witnessed multiple record highs for gold, underlining its resilience as major economies contend with turbulence and uncertainty.

US policy under President Trump has amplified these concerns. Recent public disputes between the President and Fed Chair Jerome Powell, along with attempts to remove prominent Fed governor Lisa Cook, have raised fears over the central bank’s independence. Commerzbank analysts observed that pressure on the Federal Open Market Committee to deliver more pronounced cuts only enhances the appeal of gold investments in the current landscape.

JP Morgan’s head of global commodities strategy, Natasha Kaneva, maintains a year end target of $3,675 an ounce for gold, emphasising that consistent central bank buying should provide a solid floor for prices. Investors will now be turning their attention to America’s upcoming nonfarm payrolls data, which may further clarify the outlook for the scale of any monetary easing at the September Fed gathering.