Gold Hits New High as Dollar Loses Ground Ahead of Widely Expected Rate Cut

11:52 AM EDT, 09/16/2025 (MT Newswires) -- Gold rallied to a fresh all-time high on Tuesday, underpinned by a weakening US dollar ahead of a highly-anticipated Federal Reserve interest rate cut.

Spot gold broke above $3,700 per ounce earlier in the session, a record high, and was last trading flat at $3,679.34. Gold futures for December delivery rose as high as $3,739.5 per ounce, and were most recently largely unchanged from Monday, at $3,718.80.

Markets are pricing in a near-certain rate cut of 25 basis points on Wednesday, with many analysts expecting the move to be the start of an easing cycle amid worries about a softening US labor market.

Low borrowing costs tend to boost gold's appeal as a non-yielding asset.

"Swap markets also price in at least one more cut by the end of the year, with a strong chance of a third," ING Head of Commodities Strategy Warren Patterson said in a note. "These expectations have pushed Treasury yields to multi-month lows and weakened the dollar index."

The dollar index fell 0.5% at 96.82 in Tuesday trade.

Gold prices have soared more than 40% so far this year as investors' appetite for the safe-haven asset increased amid President Donald Trump's push for an aggressive trade policy, conflicts in the Middle East and Ukraine, and central bank buying, according to ING.

"Continued concerns over the Fed's independence will also remain the focus for the global market looking ahead," Patterson said.

Trump has repeatedly called on Fed Chair Jerome Powell to cut rates.

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