Gold Surpasses $3680 Supported by Expectations of US Rate Cuts

Gold prices recorded a new record level today, Tuesday, surpassing the $3680 per ounce mark, amid a weak US dollar and market anticipation for the Federal Reserve's meeting decision scheduled for this week.

Gold touched an all-time high of $3689.27 in spot trading before settling at $3683.11 per ounce, achieving a slight gain of 0.1%. US gold futures for December delivery followed this upward trend, settling at $3721.70.

This strong rise is driven by strong market expectations that the Fed will cut interest rates, a forecast bolstered by a post from US President Donald Trump on social media on Monday, in which he called for Federal Reserve Chairman Jerome Powell to make a "larger" rate cut.

The CME Group's "FedWatch" tool reflects these sentiments, as the majority of traders expect a 25 basis point cut, with a slim chance of a larger 50 basis point cut by the end of the two-day meeting tomorrow, Wednesday. It is noted that a decrease in interest rates reduces the opportunity cost of holding non-yielding gold.

In terms of investment demand, the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, announced an increase in its holdings of the precious metal by 0.21% on Monday to reach 976.80 tons, compared to 974.80 tons on Friday.

In a separate development that may impact the monetary landscape, a US appeals court on Monday denied President Trump the ability to remove Federal Reserve Board member Lisa Cook from her position, a move that intensifies the battle threatening the independence of the central bank.

As for other precious metals, performance was mixed as silver settled at $42.71, while platinum fell 0.1% to $1399.40, and palladium rose 0.4% to $1188.59 per ounce.