Gold Surges to Lifetime Highs on Fed Rate Cut Expectations
Gold prices continued their upward rally, reaching new lifetime highs on September 2, 2025, driven by hopes of a U.S. Federal Reserve interest rate cut later this month.
In the global market, spot gold traded at $3,475 per ounce, marking a strong weekly gain of 2.25%. On the domestic front, gold on India’s MCX exchange touched ₹104,724 per 10 grams, recording a daily increase of 0.87%. This sharp rise has once again brought gold into the spotlight as a preferred safe-haven asset.
Strong Market Drivers
The demand for gold is being boosted by both central banks and private investors. Recent data shows that global central banks now hold more gold than U.S. treasuries in their reserves, a trend that was last seen in 1996. Gold-backed exchange-traded funds (ETFs) have also seen a surge, with holdings climbing nearly 13% this year to reach a two-year high of 93.28 million ounces.
Speculative interest is equally strong. According to the U.S. Commodity Futures Trading Commission (CFTC), bullish net-long positions on gold have exceeded 148,000 contracts, reflecting growing optimism among traders.
Economic and Political Context
The global economic backdrop is playing a key role in gold’s rally. U.S. inflation data showed core PCE at 2.9% year-over-year, which indicates moderation, while consumer sentiment continues to remain sluggish. These factors have strengthened expectations of a 25-basis-point rate cut by the Fed in mid-September. Fed Governor Christopher Waller’s open support for additional monetary easing has added further momentum to gold’s rise.
Political uncertainty has also contributed. A recent U.S. court ruling against several Trump-era tariffs has created uncertainty in global trade policies, though the tariffs will remain until a Supreme Court review.
Global Factors to Watch
On the international front, China’s recent efforts to build stronger economic alliances at the SCO Summit may impact currency and commodity flows, indirectly supporting gold prices. Traders and investors are also closely watching key U.S. data this week, including ISM manufacturing and services indices, along with the jobs report, for short-term direction.
Analyst Outlook: More Upside Ahead
Market analysts are largely bullish on gold, advising a “buy on dips” approach. They predict gold will soon test, and possibly break, the crucial $3,500 per ounce (₹105,500 per 10g) level. Strong resistance is seen at $3,650, while support levels are at $3,450 and $3,400.
Silver, too, is on an upward path, with analysts setting technical targets at $43 in the coming months, supported by industrial demand and global investor interest.
Conclusion
With a mix of monetary policy expectations, central bank k buying, and geopolitical uncertainty, gold is set to remain one of the most attractive assets for investors worldwide. The coming weeks, especially the Federal Reserve’s September policy decision, will play a decisive role in whether gold can sustain its rally beyond record highs.
