Gold price punches through $3,500 to hit record high on rate-cut bets

Gold hit a record high as the prospect of Federal Reserve rate cuts and growing concerns over the central bank’s future gave fresh legs to the multiyear rally in precious metals.

Bullion for immediate delivery rose as much as 0.9% to an all-time high of $3,508.73 an ounce in early trading in Asia on Tuesday, surpassing the previous peak reached in April. So far this year, the precious metal has gained more than 30%, making it one of the best-performing commodities. 

Gold is the go-to haven asset amid political and economic turmoil and typically benefits from a lower-rate environment. The metal has also found support this year as investors seek safety from market turmoil fueled by US President Donald Trump’s global trade war. The president’s escalating attacks on the Fed has become the latest cause for investor alarm, with concerns over the central bank’s independence threatening to erode confidence in the US.

The latest run has been underpinned by expectations that the US central bank will reduce interest rates this month, after Fed Chair Jerome Powell cautiously opened the door to a reduction. A key US jobs report this Friday is likely to add to signs of an increasingly subdued labor market — supporting the case for cuts. That’s boosted the allure of precious metals, which do not pay holders interest.