Gold Sets All-Time High Above $3,500 As Rate Cut Odds Surge

 

Gold Sets All-Time High Above $3,500 As Rate Cut Odds Surge

(Bullion News Network) – Gold set another all-time high on Tuesday, rocketing past $3,530 per troy ounce as markets prepare for a likely interest rate cut from the Federal Reserve in September. Silver prices also climbed, with the precious metal gaining over $1.20 per troy ounce and setting a 14-year high above $41/ozt. The price action favored silver, driving the gold-silver ratio over 0.40 points lower toward 86:1. Rate cut speculation drove the gold and silver gains today, and uncertainty surrounding tariffs, U.S. politics, and geopolitics continued to drive demand for safe haven assets like gold and silver. Platinum and palladium also trended up on Tuesday, with both metals adding over $36 per troy ounce to their spot prices amid the surge in safe haven demand. 

The Fed seems likelier than ever to pull the lever on an interest rate cut next month. CME FedWatch projects a 91.7% probability that the FOMC will vote to cut interest rates by 25 basis points when it meets in September. This projection is up from 87.8% last week and 80.3% one month ago. Rate cut futures jumped after Fed Chair Jerome Powell suggested that it may be time for the Fed to act during his keynote speech at the annual Jackson Hole economic forum. While Powell remained concerned that elevated inflation numbers and a struggling labor market could put the Federal Reserve’s two primary objectives in tension, analysts expect the Fed to cautiously adjust rates lower in September. 

Precious metals have thrived in the weeks following Powell’s speech, with gold setting an all-time high and silver notching a 14-year peak as the odds of a September rate cut climbed. Demand for safe haven assets tends to increase as interest rates fall, since cutting rates is often inflationary and precious metals like gold and silver thrive in inflationary economic environments. Rate cut speculation played a major role in gold’s 2024 price run, and the precious metal’s price trends this year have closely followed adjustments in the expected probability of rate cuts from the Federal Reserve. 

Safe haven demand also continues to play a role in gold and silver prices. Geopolitical uncertainty, particularly in the Middle East and the Ukraine-Russia conflict, has been a major driver in safe haven demand throughout 2025. U.S. President Donald Trump’s aggressive slate of tariff policies has also buoyed demand for safe haven assets, including gold and silver. 

Gold is set to close at a record high above $3,530 per troy ounce on the first day of a shortened trading week. Silver prices are also elevated, with the precious metal on track to close at a 14-year high above $41/ozt. The gold-silver ratio dropped again on Tuesday to begin the week. Platinum and palladium moved in a similar direction, with both metals gaining about $36 per troy ounce to start this trading week. Platinum prices remain elevated compared to palladium, with a disparity of over $250 separating the two metals.