Gold surges to record high above $3,500

Spot gold was up 1.5% at $3,529.01 per ounce, after jumping as high as $3,529.93

Gold rose over 1% on Tuesday, surging to an all-time high above $3,500 per ounce, with investors piling into the metal on growing conviction of a U.S. central bank rate cut and lingering political and economic risks.

Spot gold was up 1.5% at $3,529.01 per ounce as of 1800 GMT, after jumping as high as $3,529.93. Bullion has added 34.5% this year.

The gold market is entering a seasonally strong period for consumption, coupled with expectations for a rate cut at the September Fed meeting. We continue to expect new record highs, said Suki Cooper, precious metals analyst at Standard Chartered Bank.

Markets are pricing in a nearly 92% chance of a 25 bps cut at the U.S. central bank’s September 17 meeting, according to the CME FedWatch tool.

Analysts say gold’s record run this year has been underpinned by sustained central bank purchases, diversification away from the U.S. dollar, resilient safe-haven demand amid geopolitical and trade frictions, and broad dollar weakness.

Uncertainty around U.S. policy under President Donald Trump has also added to the metal’s appeal. His public clashes with the central bank, including criticism of Chair Jerome Powell and a push to remove Governor Lisa Cook, have raised concerns over the central bank’s independence.

The accusations against Cook are a clear warning to other FOMC members to bow to government pressure for substantial rate cuts. This makes gold investments more attractive in such an environment, Commerzbank said in a note, referring to the Federal Open Market Committee.

Attention now turns to U.S. nonfarm payrolls data on Friday for cues on the size of a September rate cut. A weak job print this week could reignite the conversation around the possibility of a 50 bps rate cut, according to Zain Vawda, analyst at MarketPulse by OANDA.

I do not think this will happen, even if we get a poor NFP print, but market participants may start to price in the possibility, and that could fuel the gold rally, Vawda added.