Gold prices have smashed through the $3,500 per ounce mark for the first time in history, driven by a weaker US dollar and growing expectations that the Federal Reserve will cut interest rates in September.

Spot gold climbed as high as $3,508.50 before easing slightly to $3,487.55 on Tuesday morning. US gold futures for December delivery also jumped 1.2% to $3,557.80. Overall, the precious metal has surged 32% so far in 2025.

Analysts say investors are piling into gold as uncertainty over the Fed’s independence and rate cut prospects weigh heavily on the dollar. “A weaker economic backdrop and expectations of US rate cuts are boosting precious metals,” explained Kyle Rodda, a financial market analyst at Capital.com.

The pressure on the Fed has intensified, with President Donald Trump openly criticising the central bank for being slow to cut rates. He has also lashed out at Fed Chair Jerome Powell over costly headquarters renovations and dismissed Fed Governor Lisa Cook over mortgage fraud allegations.

Despite this, Treasury Secretary Scott Bessent insisted the Fed remains independent, while acknowledging past mistakes.

Markets are now pricing in a 90% chance of a 25-basis-point cut at the Fed’s September 17 meeting, according to CME FedWatch data. Lower rates typically boost non-yielding assets like gold, making them more attractive to investors.

Safe-haven demand has also helped propel the rally, alongside heavy central bank buying and geopolitical uncertainty. Some analysts believe gold could climb even higher. “Gold’s rally could extend to $3,600 and even beyond by year-end if the Fed follows through with multiple cuts and if the Russia-Ukraine peace deal remains elusive,” said Tim Waterer, chief market analyst at KCM Trade.

Other precious metals also gained ground: silver held steady at $40.64 per ounce, close to its highest level since 2011, while platinum rose 1% to $1,412.95. Palladium, however, slipped 0.7% to $1,129.52.

All eyes are now on the US nonfarm payrolls data due Friday, which could provide fresh clues on the Fed’s next move and whether gold’s record-breaking rally has more room to run.