Gold Surges to USD3,508.9 on Fed Interest Cut Speculation

(MENAFN) Gold surged to a fresh peak of $3,508.9 on Tuesday, fueled by increasing speculation that the Federal Reserve will slash interest rates at this month’s Federal Open Market Committee meeting.

With global inflation battles intensifying, investors are closely monitoring central banks’ policy moves, particularly the Fed’s, which is seen as a key indicator of the worldwide economic trajectory.

Central banks face mounting challenges as they navigate policy constraints amid ongoing US tariffs.

Under heavy criticism from US President Donald Trump, the Fed is poised to announce its decision soon. Money market projections put the probability of a rate cut this month at 88%, with expectations for two total cuts by year-end.

The US dollar index has declined over the past five sessions, pressured by growing rate cut anticipation. This dollar weakness, combined with global risk factors, propelled gold to new heights.

Silver also kicked off the week strongly, climbing to $40.76 per ounce on Monday — its highest level since September 2011 — before edging up to $40.86 on Tuesday.

Platinum has risen steadily over the last three trading days, reaching $1,426 per ounce on Tuesday.

Palladium posted a 2.2% gain on Monday, closing at $1,139 per ounce, before slipping 0.1% to $1,137 on Tuesday.

Expert Insights on Precious Metals Outlook
Rahmi Incekara, assistant professor of economics at Istanbul’s Bahcesehir University, told Anadolu that both gold and silver have broken key resistance levels at $3,450 and $40 per ounce, respectively, with silver rallying 40% year-to-date.

He highlighted that the upcoming Friday release of US non-farm payrolls could reshape asset pricing, noting, “a large 50-basis-point rate cut by the Fed may further rally precious metals.”

Incekara also emphasized the importance of industrial demand for silver, stating, “Silver investors should see that the industrial demand needs to be taken into account — silver faced a supply deficit for the fifth consecutive year due to high demand from the industry, so it’s possible that the silver demand is high on the exchange-traded fund side.”

Zafer Ergezen, a futures and commodity markets expert, told media that expected rate cuts will positively impact precious metals prices while predicting a further decline in the US dollar index amid such cuts.

MENAFN02092025000045017169ID1110005755