Gold hits all-time peak

Gold prices climbed to a new all-time high of $3,710 per ounce on Monday, extending this year’s historic rally as investors positioned ahead of key US inflation figures and comments from several Federal Reserve officials that could shape the near-term policy outlook.

The move builds on last week’s momentum after the Fed delivered its first interest rate cut of 2025, citing signs of labor market weakness and softer underlying demand.

Markets are now firmly pricing in two more 25-basis-point reductions at the Fed’s October and December meetings, with traders betting that a broader easing cycle could stretch into 2026 if economic conditions continue to deteriorate.

Expectations of sustained policy accommodation have provided the backbone for bullion’s nearly 40% surge since the start of the year, cementing its role as one of the best-performing major assets of 2025.

Beyond monetary policy, gold continues to benefit from heightened safe-haven demand. Persistent geopolitical risks—from the conflict in Ukraine to rising tensions in the Middle East—have driven investors toward defensive assets.

Economic uncertainty surrounding President Donald Trump’s tariff measures, which have fueled volatility in global trade and pressured corporate earnings outlooks, has further strengthened gold’s appeal as a hedge.

Meanwhile, structural demand remains supportive: central banks, particularly in emerging markets, have extended their gold-buying spree to diversify reserves, while strong ETF inflows highlight robust institutional and retail appetite. Together, these factors have helped offset headwinds from a stronger dollar in recent weeks, leaving gold well positioned to hold near record levels.

Looking ahead, the release of US consumer price data later this week will be closely watched for confirmation that inflationary pressures remain subdued despite elevated tariffs, potentially giving the Fed more room to accelerate rate cuts.

Markets will also pay close attention to speeches from Fed officials, especially Chair Jerome Powell, for clues on whether policymakers are comfortable with current market expectations or inclined to temper them.

For now, the combination of policy easing prospects, geopolitical risks, and strong physical and investment demand continues to underpin the metal’s extraordinary rally.