Onome Amuge
Gold soared to a new all-time high on Monday, climbing past the previous record of $3,674 an ounce to touch $3,682, as investors positioned ahead of this week’s Federal Reserve policy meeting. The rally underscored growing expectations that the US central bank will resume cutting interest rates despite sticky inflation and lingering economic uncertainty.
Spot gold was last trading at $3,681, up more than 1 per cent on the day, leaving bullion poised to test the psychologically important $3,700 level. The ascent reflects a sharp retreat in US Treasury yields and a softer dollar, both of which have bolstered demand for the non-yielding asset.
The shift in momentum follows the Fed chair Jerome Powell’s unexpectedly dovish tone at the Jackson Hole symposium in late August, which signalled a policy pivot. Analysts said the move all but opened the door to a 25 basis point cut at the September 16–17 Federal Open Market Committee meeting, with some investors betting on a deeper 50 bp reduction.
“The combination of slowing labour market data, political pressure, and persistently high but stabilising inflation means the Fed has little choice but to ease. Gold is a natural beneficiary in this environment, especially with the dollar under pressure,” said Monica Defresne, senior strategist at Société Générale.
The optimism over looser monetary policy intensified after last week’s revision of US payroll figures showed that job gains between April 2024 and March 2025 had been overstated by 911,000. The downgrade stoked fears of a sharper deterioration in the labour market than previously thought. Meanwhile, consumer sentiment data from the University of Michigan showed Americans were increasingly pessimistic about the economy, with five-year inflation expectations rising from 3.5 to 3.9 per cent.
Beyond the Fed, markets are eyeing a busy economic calendar this week, including US retail sales data on Tuesday that could offer fresh insights into consumer resilience. Any signs of weakness would strengthen the case for monetary easing, providing further fuel for bullion’s rally.
“Gold is the clearest expression of hedging against policy missteps. Investors are increasingly convinced the Fed will have to sacrifice its inflation fight to shore up growth. That narrative is supportive for bullion well into year-end,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold has gained nearly 20 per cent so far in 2025, outpacing most major asset classes as investors seek safety amid geopolitical and economic uncertainty. With pressure mounting on central banks globally to ease policy, traders expect the precious metal to remain a barometer of shifting confidence in fiat currencies and sovereign debt.
