Gold price soars to new record ahead of fed rate cut
By Praisebell Rosemond Larbi
Gold extended its remarkable rally on Tuesday, soaring to a new all-time high of USD3,695.16 per troy ounce, as investors flocked to the safe-haven asset amid mounting expectations that the United States Federal Reserve will begin a rate-cutting cycle.
The precious metal has now gained more than 10 per cent in the past month and an extraordinary 43 per cent year-on-year, underscoring its appeal in an environment of economic uncertainty and a weakening US dollar.
Traders are increasingly convinced that the Fed will trim its benchmark rate by 25 basis points at the conclusion of its two-day policy meeting, marking the first cut since December.
Such a move would signal the start of a broader easing cycle that markets anticipate could stretch into 2026, a backdrop typically favourable for non-yielding assets like gold.
The rally reflects a potent mix of factors. Persistent central bank purchases, particularly from emerging-market economies seeking to diversify reserves, have steadily supported prices.
Exchange-traded fund (ETF) inflows have accelerated as investors seek protection against geopolitical tensions and concerns over global growth. Meanwhile, a softer dollar, which makes gold cheaper for holders of other currencies, has added extra momentum to the surge.
Market participants now turn their attention to the Fed’s Summary of Economic Projections and the closely watched dot plot of interest rate expectations, to be released alongside the rate decision.
Upcoming US data, including retail sales and industrial production figures, may further influence sentiment. Still, many strategists argue that gold’s fundamentals remain robust.
“Even if the Fed moves slowly, the combination of global uncertainty and strong reserve demand keeps the upside bias intact,” said one commodities analyst.
