Onome Amuge
Gold prices climbed to an unprecedented high on Tuesday, extending a year-long rally as expectations hardened that the US Federal Reserve will lower interest rates at the conclusion of this week’s policy meeting.
The precious metal rose to $3,703.24 an ounce, breaking through its previous peak of $3,674.70, after traders priced in a near-certain quarter-point cut in the federal funds rate and left open the possibility of a larger move.
The gains accelerated as the dollar tumbled to its weakest level since early July, making bullion cheaper for overseas buyers and fuelling demand from investors seeking a hedge against monetary easing. The US dollar index fell to 96.738, slipping below key technical thresholds, while the euro strengthened to $1.1837 and the Australian dollar touched a 10-month high.
Gold has risen more than 40 per cent this year, buoyed by central bank purchases, heightened geopolitical tensions and what analysts describe as a slow but persistent shift away from the dollar in global reserves. The latest bullish ride follows months of market unease over trade policy under President Donald Trump, who on Monday publicly pressed the Fed for a “bigger” rate cut.
“Gold remains the ultimate beneficiary of a dovish Fed and a weakening dollar. Institutional flows and sovereign diversification are amplifying the move, and the technical picture remains supportive,” said one strategist at a US investment bank.
Market participants are closely watching for Fed chair Jay Powell’s tone when the central bank delivers its decision on Wednesday. Any signal of further easing could reinforce the rally, while a hawkish surprise or a sharp rebound in Treasury yields might test support around $3,612 an ounce.
Analysts say a sustained move higher would put gold on track to challenge the $3,750 level in the coming weeks, underscoring the role of non-yielding assets as safe havens in a low-rate, uncertain environment.
