GOLD soared to a record $3,600 per ounce on Monday, extending a remarkable rally fuelled by anticipation of imminent US interest rate reductions and mounting concerns over Federal Reserve autonomy.
Market analysts remain optimistic about the precious metal’s trajectory. “Fed rate cut expectations are helping gold’s status as the inflation hedge,” Chris Turner, global head of markets research at ING told the Financial Times. Real interest rates appear set to turn negative again, he said.
Matthias Scheiber from Allspring Global Investments expressed continued bullishness, citing worries over Fed independence as a key driver. Meanwhile, Berenberg’s Atakan Bakiskan anticipates further price gains as foreign investors shift from US Treasuries to gold amid declining confidence in American assets.
The latest milestone comes less than a week after gold first breached $3,500, with Monday’s surge aided by Friday’s disappointing US employment figures. Markets now fully expect at least a quarter-point Fed rate cut next week, whilst some traders are wagering on a larger half-point reduction.
Bullion has climbed nine percent over three weeks and 37% year-to-date, benefiting from inflation concerns and America’s mounting public debt burden. Stagflation fears linked to Donald Trump’s tariff policies have added further momentum.
The dollar’s decline – down over 10% against major currencies this year – has also supported gold prices. Adding to market uncertainty, Trump’s attempt to dismiss Fed governor Lisa Cook remains under legal challenge.
Over the weekend, the White House clarified that gold bars would be exempt from import tariffs, ending weeks of market confusion.
