A fresh bout of uncertainty and mounting anticipation of a Federal Reserve interest rate cut added glitter to gold, pushing it to a record high on Tuesday.
Spot gold surged 1.8 percent, reaching USD3,540 per ounce on Tuesday afternoon, a 35 percent increase since the start of the year. The climb has been supported by central bank buying, geopolitical tensions in the Middle East, and the growing economic uncertainty.
Demand for gold got a fresh boost after a U.S. federal appeals court ruling late Friday—US markets were closed Monday for the Labor Day holiday–cast doubt on the future of the reciprocal tariff being championed by President Donald Trump.
The court decision rekindled trade concerns that had previously subsided. And as is usual during times of economic uncertainty, gold’s reputation as a safe-haven investment gets highlighted, driving demand for the precious metal.
As uncertainty over trade outlook is stoked, there is growing anticipation among investors hat the Fed will lower interest rates at its upcoming policy meeting in two weeks. Lower interest rates reduce the appeal of yield-bearing assets, adding glitter to gold.
Eyes will be on the release of the August jobs report this Friday, which could provide the next key data point for determining the likelihood of a rate cut. A weaker-than-expected jobs number would further support expectations for a Fed action.
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