Gold Rises to Record High Amid Increased Fed Rate Cut Bets

01:56 PM EDT, 09/09/2025 (MT Newswires) -- Gold prices advanced to a record high on Tuesday amid rising optimism that the Federal Reserve is set to kick off what will likely be a series of interest rate reductions.

Gold futures rose 0.2% to $3,683.70 per ounce, having traded above $3,700 earlier in the session. Spot gold was last up 0.3% at $3,645.73 per ounce, down from as high as $3,674.09.

"Prices have been rising for three consecutive sessions, supported by increased bets on a wave of (Fed) rate cuts this year," ING said in a Tuesday note.

The safe haven asset's price has soared about 40% since the start of the year, according to the ING report. The yellow metal has an inverse relationship with interest rates.

"Swap traders continue to boost their bets on interest rate cuts and price in three rate cuts this year, including a quarter-point cut at the Fed's meeting next week," ING Head of Commodities Strategy Warren Patterson said.

Markets are currently pricing in a 92% probability that the Federal Open Market Committee will reduce its benchmark lending rate by 25 basis points on Sept. 17, with the remaining odds in favor of a 50-basis-point cut, according to the CME FedWatch tool.

The US Bureau of Labor Statistics said on Tuesday that nonfarm payrolls growth was 911,000 lower than previously reported for the year through March.

"Monetary policy expectations are now likely to become the primary driver for gold's direction," Patterson said. "Continued concerns over the Fed's independence will also remain the focus for the gold market looking ahead."

President Donald Trump has clashed with Fed Chair Jerome Powell over monetary policy. The central bank left its benchmark lending rate unchanged for a fifth consecutive meeting in July.

Last month, Powell indicated a potential monetary policy pivot to lower rates. At the time, he said downside risks to employment were rising, while the effects of tariffs on inflation would likely be short lived.

Israel on Tuesday attacked senior Hamas officials in Doha, Qatar, CNBC reported.

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