Gold reached a new historic high, surpassing $3,700 per ounce for the first time, as investors bet on an imminent rate cut by the US Federal Reserve (Fed) this week and consider the possibility of further monetary easing in the coming months.

The rise of the precious metal was supported by the dollar index falling to a more than ten-week low. Markets have already priced in a Fed rate cut, alongside the release of the Fed’s quarterly economic and monetary policy projections (“dot plot”). At the same time, Fed Chair Jerome Powell is scheduled to hold a press conference following the decision.

Weakness in the labor market and the absence of negative surprises in inflation increase the likelihood of further rate cuts this year, a development considered particularly positive for gold, which does not yield interest.

Meanwhile, pressure from US President Donald Trump on the Fed—including his efforts to remove Governor Lisa Cook—strengthens speculation of a looser monetary policy. His economic advisor, Steven Mnuchin, is also expected to join the Fed Board later this week.

Gold has risen more than 40% in 2025, outperforming major assets such as the S&P 500, and recently surpassed the inflation-adjusted 1980 record. Trade and geopolitical uncertainties, central bank purchases, and ETF inflows have further supported the rise. Goldman Sachs estimates that gold could approach $5,000 if just 1% of private US bondholders shift to the precious metal.

On Tuesday afternoon in London, gold was up 0.4% at $3,720. The new record came after a 1% increase on Monday. The Bloomberg Dollar Spot Index fell 0.4%. Silver climbed to a 14-year high, while platinum and palladium declined.