The gold price continues its record rally as the next US Federal Reserve meeting approaches. The expectation that the Fed will eventually begin to cut the key interest rate in the US is driving the yellow metal to now more than $3,685 per ounce, marking another record high.
The yellow metal has thus gained more than 40% in 2025. Factors that have triggered this development include strong, sustained purchases by central banks worldwide and increasing geopolitical uncertainties, which make gold appear increasingly attractive as a safe haven. The gold price initially consolidated for quite some time after its rise to the $3,500 mark, but as predicted by various analysts, a breakout now seems imminent.
Gold Currently Benefiting Primarily from Interest Rate Cut Expectations
The recent surge is primarily due to market expectations of an interest rate cut by the Federal Reserve of at least 25 basis points – especially after the latest US labor market data turned out weak. These expectations have also pushed US bond yields to their lowest level in months. This, in turn, weakens the US dollar and increases gold’s attractiveness as a means of wealth preservation.
Furthermore, there is speculation that the US central bank might implement another 25-basis-point rate cut before the end of the year, which many observers consider a trigger for a potential rise in the precious metal to $3,700 per ounce. However, many experts also question whether gold will be able to maintain its gains, given that an initial rate cut is largely priced into the gold price, should the Fed not hint at a further rate cut this year.
Many analysts agree, however, that in this case, a pullback in the gold price would likely only be temporary.
The Federal Open Market Committee (FOMC) meeting, beginning this Tuesday, is also under particular scrutiny, as the independent institution has been under significant pressure in recent weeks and months. US President Donald Trump is pulling out all the stops to gain greater influence over the central bankers’ decisions. Should this development continue and the Fed even lose its independence, many experts believe it could mean a further price surge for gold. At the major US bank Goldman Sachs, they even expect the gold price to rise to $5,000 per ounce in this scenario.
