Gold renewed its historical record: over $3650 per ounce amid expectations of Fed rate cut and global political instability
Kyiv • UNN
Global gold prices rose to a record level, exceeding $3650 per ounce. This happened amid expectations of a US Federal Reserve interest rate cut and increased demand for "safe-haven assets" due to political turmoil worldwide.
World gold prices rose to a record high on Tuesday, exceeding $3,650 per ounce, amid expectations of a rapid interest rate cut by the US Federal Reserve and increased demand for "safe assets" due to political turmoil in the world. This was reported by Investing, writes UNN.
Details
As of 04:44 GMT, the spot price rose by 0.6% to $3656.70, and December futures reached $3695.25 per ounce. Investors are massively transferring capital into gold, as the market estimates a 92.4% probability of a 25 basis point rate cut by the Fed at the September 16-17 meeting. There is also a smaller chance (7.6%) that the regulator will cut by half a percent at once.
The latest weak US labor market data, particularly almost zero employment growth in August, signaled such a scenario. Despite this, Fed officials warn that rate cuts could face inflationary pressure risks, particularly due to the new trade tariffs of the Donald Trump administration.
Geopolitical factors also influenced gold's dynamics: France plunged into political crisis after Prime Minister François Bayrou's resignation. Japan faced uncertainty after Shigeru Ishiba's unexpected resignation. The US is discussing new sanctions against Russia after a massive airstrike on Ukraine, which resulted in numerous casualties.
Under such conditions, investors increased demand for gold and other precious metals. Silver approached a 14-year high, while platinum rose 0.6% to $1397.25 per ounce.
Recall
Despite the previous increase in the value of monetary gold as a method of saving money, its popularity as a jewelry metal has significantly decreased. As noted in a comment for UNN by financial expert Olena Sosiedka, this was most reflected in key markets - India and China.
Gold prices in the global market have become so high that it has reduced the popularity of buying gold jewelry. This was most reflected in key markets such as India and China, but a global decline in demand is felt worldwide. Due to rising prices, former fans of gold jewelry are increasingly preferring other precious metals. Instead, gold is more often considered as a way to preserve capital in conditions of economic instability and high inflation. And not as an everyday item
In addition, analysts at Goldman Sachs, one of the largest and most influential investment banks in the world, predict that if the dollar continues to fall, the value of gold will reach $3,700 per troy ounce by the end of 2025.