Gold extended its record-breaking run on Tuesday, leaping past $3,700 an ounce to reach an all-time peak of $3,703.24. The surge reflects mounting expectations that the Federal Reserve will lower interest rates at the conclusion of its policy meeting this week. Sentiment in the bullion market strengthened further as the U.S. Dollar Index slid to its weakest level since early July, adding fuel to the rally in precious metals.

Fed Rate-Cut Bets Intensify Under Political Pressure

Futures markets now show near-unanimous expectations of a 25-basis-point rate reduction, with a small but growing minority betting on an even larger 50-bp move, according to CME’s FedWatch tool. President Donald Trump added to the momentum by urging the Fed to “go bigger” with rate cuts in a social-media post on Monday, signaling White House support for easier monetary policy. Lower rates tend to favor non-yielding assets such as gold, prompting investors to boost their exposure to safe havens ahead of Wednesday’s FOMC announcement.

The U.S. dollar’s retreat has been stark. The DXY broke through important support levels at 97.253 and 97.109 before plunging to 96.738. A drop below the July 1 low of 96.377 could open the way to deeper losses toward 95.137. The dollar’s weakness has made gold more affordable for buyers using other currencies, boosting demand. In currency markets, the euro rose to $1.1837 and the Australian dollar hit a 10-month high at $0.6677, underscoring broad-based dollar softness.

Central Bank Buying and Geopolitical Risks Support the Rally

Gold has surged about 41% so far this year, underpinned by heavy central bank purchases, ongoing geopolitical tensions, and a global move away from dollar-denominated reserves. The metal first crossed the $3,000 threshold in March amid mounting concerns over U.S. trade policy. Analysts note that institutional flows and sovereign diversification remain key tailwinds, particularly in an environment of monetary easing and inflation uncertainty.

Technical Picture: Bulls in Control

From a chart perspective, gold’s push above the previous high at $3,674.70 cements the uptrend. The swing low at $3,612.83 is now viewed as an important gauge of trend strength; a decisive break below that level could trigger a pullback toward major support in the $3,511.75–$3,500 area. For the moment, however, the outlook stays positive. Unless Fed Chair Jerome Powell adopts a surprisingly hawkish tone or Treasury yields rise sharply, gold is likely to retest and potentially extend its highs.

Outlook: Still Bullish

With a dovish Fed and a softening dollar as the backdrop, the precious metal’s momentum appears intact. Traders should brace for volatility around Wednesday’s policy statement, but unless the central bank signals a dramatic shift, gold’s upward trajectory looks set to continue.

Disclaimer: The information contained herein (1) is proprietary to BCR and/or its content providers; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely; and, (4) does not constitute advice or a recommendation by BCR or its content providers in respect of the investment in financial instruments. Neither BCR or its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.