The precious metal is now up more than 34% in the year to date
Gold futures set a fresh record high on intensifying concerns around the U.S. Federal Reserve’s independence, mounting interest-rate-cut bets and tariff uncertainty.
Continuous gold futures on the New York Mercantile Exchange rose 0.8% to $3,543.80 a troy ounce in European midday trading, having reached as high as $3,557.10/oz earlier in the session.
The precious metal is now up more than 34% in the year to date on safe-haven demand, reflecting U.S. tariff-driven trade uncertainty and persistent geopolitical tensions, President Trump’s move to oust Fed Governor Lisa Cook, and expectations of a September interest-rate cut.
Gold miners climbed on the record, with Hochschild Mining HOC 0.40%increase; green up pointing triangle shares up 6.2%, Fresnillo up 1.7% and Harmony Gold up 4.6%.
Gold’s latest increase follows Friday’s in-line Personal Consumption Expenditure inflation data, which supported growing interest rate-cut expectations, SP Angel analysts said in a note. The data showed July consumer spending rose 0.3% on month, in-line with analyst expectations and leaving the Fed on track to cut rates.
Fed Chair Jerome Powell had opened the door to monetary policy easing in a speech to the Jackson Hole symposium on Aug. 22, with markets now broadly expecting a rate cut in September. Lower interest rates typically boost the appeal of non-interest bearing bullion. Investors are now awaiting Friday’s August jobs report for additional hints on the size and scope of potential rate cuts, ING analysts said in a note.
Trump has moved to fire Cook over allegations of mortgage fraud, with Cook suing to block her removal. Initial arguments at a Washington D.C. federal district court Friday left it unclear whether Cook was still serving in her role, raising uncertainty. The move potentially undermines the credibility of the Fed’s independence in the eyes of the market, raising safe-haven demand for gold and posing headwinds to the U.S. dollar.
An appeals court on Friday also upheld a previous court ruling that found a significant portion of Trump’s tariffs are illegal, leaving the future of the administration’s trade policy uncertain. The tariffs will be kept in place until mid-October pending litigation, but the decision has weighed on the U.S. dollar and sent gold higher.
Escalating geopolitical tensions have further contributed to gold’s safe-haven appeal, ANZ Research analysts said. A Russia-Ukraine peace deal remains elusive with both countries carrying out strikes on each other, while Germany and France push for secondary sanctions on nations supporting Russia’s invasion, including major buyers like China and India, analysts wrote.
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