Gold News: Gold Price Hits Record High Above $3,700 as Dollar Breaks Key Support

Gold Rally Extends Above $3,700 as Fed Rate Cut Bets Crush Dollar

Gold prices surged above $3,700 an ounce on Tuesday, setting a new all-time high at $3,703.24, as traders ramped up bets on a Federal Reserve rate cut at the conclusion of this week’s FOMC meeting. The rally gained further traction as the U.S. Dollar Index (DXY) plunged to its lowest level since early July, reinforcing the bullish momentum in bullion.

Fed Expectations and Trump Pressure Fuel Rate Cut Speculation

Traders are pricing in a near-certain 25-basis-point rate cut, with a slim chance of a 50-bp move, according to CME FedWatch data. U.S. President Donald Trump amplified market pressure by calling for a “bigger” rate cut via social media on Monday, signaling political backing for looser monetary policy. With non-yielding assets like gold benefiting from lower interest rates, market participants are front-running the Fed decision by increasing exposure to safe-haven assets.

Dollar Index Breaks Key Support, Eyes 95.137 Target

The DXY extended losses, dropping to 96.738 after breaching critical support at 97.253 and 97.109. A sustained break below the July 1 low of 96.377 could open the door to deeper losses, with 95.137 in view. The dollar’s sharp decline has made gold cheaper for non-dollar buyers, amplifying demand. The euro climbed to $1.1837 and the Australian dollar briefly touched a 10-month high at $0.6677, reflecting broad-based dollar weakness.

Central Bank Buying and Safe-Haven Demand Add Fuel

Gold has gained roughly 41% year-to-date, propelled by central bank purchases, persistent geopolitical risks, and a global de-dollarization trend. The metal first breached $3,000 in March, spurred by concerns over Trump’s trade policies. Analysts note that institutional demand and sovereign diversification remain core drivers, especially in a climate of monetary easing and inflation uncertainty.

Gold Prices Forecast: Support Holds, Bulls Target New Highs

Gold’s breakout above the previous top at $3,674.70 confirms the uptrend, with the swing bottom at $3,612.83 now acting as a key trend indicator. A failure there could trigger a correction toward major support at $3,511.75–$3,500.20. For now, the technical picture remains bullish. Unless Fed Chair Powell strikes a hawkish tone or Treasury yields spike significantly, gold appears set to retest highs with a bullish bias.

Outlook: Bullish. A dovish Fed and soft dollar continue to underpin the gold rally, with upside momentum likely to persist if Powell hints at further easing. Traders should watch for volatility around Wednesday’s FOMC statement.

More Information in our Economic Calendar.