(MENAFN) Gold reached an unprecedented peak of $3,508.9 on Tuesday, driven by growing expectations that the Federal Reserve could reduce interest rates during its upcoming Federal Open Market Committee meeting. Investors are closely monitoring central banks’ policy choices as the global effort to control inflation continues, with the Fed’s decision seen as a key indicator of the worldwide economic trajectory.

Central banks are navigating limited policy flexibility while facing challenges such as US tariffs. The Federal Reserve, which has faced persistent criticism from US President Donald Trump, is scheduled to announce its decision this month. Market estimates suggest there is an 88% chance that the Fed will lower rates, with the possibility of two reductions before the year concludes.

The US dollar index has declined over the past five trading sessions amid rising expectations of a rate cut. A softer dollar, coupled with global uncertainties, has contributed to pushing gold prices to record highs.

Silver also showed significant gains at the start of the week, reaching $40.76 per ounce on Monday—its highest level since September 2011—and climbed further to $40.86 per ounce on Tuesday. Platinum has seen steady growth over the past three trading sessions, trading at $1,426 per ounce on Tuesday. Palladium rose 2.2% to $1,139 per ounce on Monday, before slightly retreating 0.1% to $1,137 per ounce.

Rahmi Incekara, assistant professor of economics at Istanbul-based Bahcesehir University, told Anadolu that "gold and silver both exceeded their key resistance levels at $3,450 and $40 per ounce, respectively," adding that "silver gained 40% since the beginning of the year." He also highlighted that "the non-farm payrolls to be released on Friday may change the outlook for asset pricing, while a large 50-basis-point rate cut by the Fed may further rally precious metals."

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