Kathrine Frich
One of the main drivers of the rally is the falling value of the US dollar.
One of the main drivers of the rally is the falling value of the US dollar.
Gold Reaches Record High Above $3,500
The price of gold has surged past $3,500 per ounce for the first time in history.
Spot gold hit $3,508.50 before easing slightly to $3,487.55.
Futures for December delivery also rose, climbing 1.2% to $3,557.80.
A 32% Surge in 2025
Since January, gold has gained more than 32%, making it one of the top-performing assets of the year.
Investors have turned to the metal as economic and political uncertainty grows.
Analysts say the scale of the increase reflects deep unease in global markets.
Weakening Dollar Boosts Gold
One of the main drivers of the rally is the falling value of the US dollar.
A weaker dollar makes gold cheaper for buyers holding other currencies, pushing up demand.
This link between the dollar’s decline and gold’s rise has been evident throughout the year.
Expectations of Fed Rate Cuts
Markets also expect the US Federal Reserve to cut interest rates in September.
Lower rates reduce the opportunity cost of holding gold, which does not yield interest.
This shift increases the appeal of the precious metal as an alternative store of value.
Analysts Explain the Trend
“A consequence of the weaker economic backdrop and expectations of lower interest rates in the US is the rise in precious metals prices,” explained Kyle Rodda.
He is a financial market analyst at Capital.com.
Crisis of Confidence in Dollar Assets
Rodda also pointed to another factor:
“Another factor is the crisis of confidence in dollar assets, caused by US President Donald Trump’s attack on the Fed’s independence.”
Political disputes in Washington have raised doubts about the stability of US financial governance.
Trump’s Attacks on Powell
For months, Trump has criticized the Fed and its chairman Jerome Powell.
He has accused Powell of failing to cut rates quickly enough to support growth.
Trump even mocked the costly renovation of the Fed’s headquarters in Washington, making it part of his political campaign.
Treasury Defends Fed’s Role
On Monday, Treasury Secretary Scott Bessent sought to calm the debate.
He stated that the Federal Reserve “is and should be independent,” but admitted the bank had “made many mistakes.”
Bessent also defended Trump’s controversial decision to fire Fed Governor Lisa Cook over mortgage fraud allegations.
