Gold climbs to fresh record high above $3,700 on rate-cut bets

Gold climbed to fresh record highs on Tuesday, trading above $3,700 an ounce as mounting expectations of U.S. interest rate cuts, a softer dollar and robust demand from exchange traded funds and central banks pushed bullion to new peaks, traders and analysts said. Spot gold was near $3,752 per ounce after touching intraday highs above $3,758 on Comex, while U.S. futures also rose; intraday records varied across trading venues and over the past week, reflecting rapid moves in the market.

The bull run follows last week’s 25 basis point Federal Reserve rate cut and market pricing that further reductions are likely. The CME FedWatch tool showed investors assign roughly a 90 percent probability of another 25 basis point cut in October and a strong chance of a further cut in December. Traders were also awaiting a highly anticipated speech by Fed Chair Jerome Powell for fresh policy signals. Comments from newly appointed Fed Governor Stephen Miran questioning the stance of monetary policy, and contrasting views from other Fed officials, have added to uncertainty over the pace and scale of future easing.

ETF inflows and central bank purchases are reinforcing the rally. Holdings in the...