Gold Prices Surge Above $3,500 Amid Fed Rate Cut Speculation

As of September 3, 2025, gold prices have surged to record highs, with XAU/USD trading above $3,500 per ounce. This rise is primarily driven by growing expectations of an imminent Federal Reserve interest rate cut, a weakening U.S. dollar, and increased demand for safe-haven assets due to global economic uncertainties.

Current Market Snapshot

Spot Gold Price: On September 2, 2025, spot gold reached a peak of $3,535.07 per ounce, before stabilizing at $3,480.57, marking a 0.1% daily increase. U.S. gold futures for December delivery saw a 0.9% rise, reaching $3,549.

Trading Volume: On September 2, approximately 390,816 gold futures contracts were traded on the COMEX, reflecting growing investor interest in gold.

Year-to-Date Performance: Gold prices have seen a 41.72% rise over the past month, signaling strong bullish momentum.

Fed Rate Cut Expectations

Market participants are widely anticipating a 25-basis-point interest rate cut by the Federal Reserve during its FOMC meeting on September 17, 2025. Despite strong economic indicators suggesting a potential divergence, the sentiment largely leans toward monetary easing.

Institutional Forecasts for Gold Prices

Morgan Stanley: The bank has revised its gold price forecast for Q4 2025 to $3,800 per ounce, citing a weaker U.S. dollar, potential inflation risks, and ongoing global uncertainties.

Goldman Sachs: Goldman Sachs predicts that gold will rise to $3,700 per ounce by the end of 2025, supported by strong central bank demand and continuous ETF inflows.

Technical Analysis

Technical indicators show that gold prices may continue their upward momentum. The Relative Strength Index (RSI) remains in bullish territory, and gold is trading above critical moving averages, indicating sustained buying interest. Analysts forecast XAU/USD could target $3,615 in the short term, with potential resistance near $3,650.

Conclusion

The XAU/USD pair is reflecting a strong bullish trend, supported by expectations of a Federal Reserve rate cut, a weakening U.S. dollar, and growing demand for gold as a safe-haven asset. Institutional forecasts suggest that gold prices may continue to rise, with potential targets ranging from $3,700 to $3,800 per ounce by the end of 2025.

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