Gold prices rose in the European market on Tuesday, extending gains for the third consecutive session and setting a fresh all-time high, on the verge of surpassing the $3,700 per ounce barrier for the first time in history, supported by the continued decline of the U.S. dollar in the foreign exchange market.
Later today, the Federal Reserve’s highly anticipated monetary policy meeting will commence, with decisions due on Wednesday. Market expectations currently remain anchored on a 25 basis-point interest rate cut.
Price Overview
Gold prices today: The price of the precious metal rose by 0.5% to a new all-time high of $3,697.26, from the opening level of $3,679.21, after recording a session low of $3,674.82.
At Monday’s settlement, gold gained 1.0%, its second consecutive daily rise, also hitting a new record high.
U.S. Dollar
The dollar index fell 0.3% on Tuesday, deepening losses for the second straight session and hitting a 10-week low of 97.04, reflecting continued weakness in the U.S. currency against a basket of major peers.
This decline is attributed to active selling ahead of the Fed’s expected decision on Wednesday to cut interest rates by 25 basis points.
At the same time, U.S. President Donald Trump has been increasing pressure on Fed policymakers to implement deeper rate cuts. In a social media post on Monday, Trump called on Fed Chair Jerome Powell to deliver a “larger” rate cut, citing risks facing the U.S. housing market.
Federal Reserve
Later today, the Federal Reserve begins its key monetary policy meeting, with decisions due on Wednesday. Expectations indicate a 25 basis-point rate cut.
Monetary policy data, updated economic projections, and remarks from Fed Chair Jerome Powell are expected to provide strong clues on whether additional cuts will follow later this year.
U.S. Interest Rates
According to CME FedWatch: The probability of a 25 basis-point cut at this week’s meeting is currently priced at 100%, while the chance of a larger 50 basis-point cut stands at 4%.
For the October meeting, markets are also pricing a 100% chance of a 25 basis-point cut, and a 3% chance of a 50 basis-point cut.
Gold Outlook
UBS analyst Giovanni Staunovo said: “Dollar weakness is playing a major role in driving gold higher, but it all comes down to expectations for the Fed’s rate cut this week.”
Staunovo added: “With the Fed’s statement imminent, we expect higher volatility, especially if markets perceive the cut to come with a hawkish tone.”
He further noted: “But with Trump pushing for a larger cut, I believe gold is likely to trend higher in the coming months.”
Traders and industry experts at the India Gold Conference in New Delhi commented that gold’s stunning surge to successive record highs shows every sign of continuing through the end of 2025, though a strong technical correction is expected before it breaks above $4,000 per ounce in 2026.
SPDR Fund
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 2.01 metric tons on Monday, lifting the total to 976.81 metric tons, rebounding from 974.80 metric tons, the lowest since August 28.
