With the recent milestone, gold prices have now surged over 100 times since former U.S. President Richard Nixon abandoned the Bretton Woods system of fixed exchange rates.
Gold prices surged above $3,500 for the first time in early trading on Tuesday, aided by optimism around a rate cut by the Federal Reserve later this month.
Spot gold climbed 0.5% at $3,494.93 per ounce at 3.29 a.m. GMT (11.30 p.m. ET), scaling back some of the earlier gains when it rose as high as $3,508 per ounce. The U.S. gold futures also surged 1.3% to $3,561.60 per ounce.
With the recent milestone, gold prices have now surged over 100 times since former U.S. President Richard Nixon abandoned the Bretton Woods system of fixed exchange rates, which had maintained a gold price of $35 per ounce.
Federal Reserve Chair Jerome Powell cautiously hinted at a potential rate cut at the central bank’s annual symposium in Jackson Hole, Wyoming, last month, which has aided the bullion eke out gains in each of the previous five sessions. The non-yielding bullion tends to gain in low-interest-rate environments.
Retail sentiment on Stocktwits about the SPDR Gold Shares ETF was in the ‘extremely bullish’ territory at the time of writing.
According to the CME Group’s FedWatch tool, around 89.7% of traders expect a 25-basis-point cut during the Fed’s policymakers’ meeting on Sept. 16-17. In July, core inflation in the U.S., which excludes food and energy costs, rose 2.9%, in line with Dow Jones estimates.
U.S. President Donald Trump has repeatedly attacked Powell for not lowering interest rates sooner. He has also fired Fed Governor Lisa Cook over an alleged mortgage fraud. Cook has denied any wrongdoing, and a federal court is expected to decide her fate soon.
The U.S. dollar has declined in value compared to most major currencies, as investors have been concerned about the Fed’s independence, a key factor in determining the value of currencies. A weaker greenback makes the dollar-priced bullion attractive for overseas investors.
So far this year, gold prices have rallied over 30%, also aided by geopolitical uncertainty and robust buying from central banks.
“As I forecast on Friday, we could be looking at major gap-ups in gold and silver ETFs and miners tomorrow,” economist and gold bull Peter Schiff said on X late Monday.
Silver prices were also on the rise, hovering near the $41-mark.
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