Gold stabilizes after reaching all-time high supported by interest rate cut expectations and debt fears

SadaNews - Gold experienced a six-day rise, pushing prices to an all-time high on Tuesday, as expectations of U.S. interest rate cuts enhanced the metal's appeal, and traders sought a safe haven following a wave of selling in the stock and bond markets.

Spot gold prices stabilized around $3530 an ounce, after rising by 1.8% to reach a new peak at $3540. Demand for the metal as a safe haven has been bolstered by a risk-averse sentiment in financial markets, with renewed concerns about the future of the Federal Reserve and budgetary fears in developed countries, which pressured long-term government bonds and stocks.

Gold is one of the best-performing commodities in 2025

Gold has risen by more than a third this year, making it one of the best-performing commodities. This recent spike fueled expectations that the U.S. central bank will cut interest rates this month, after Federal Reserve Chairman Jerome Powell cautiously opened the door to such a reduction.

The significant U.S. jobs report expected to be released on Friday is likely to reinforce signs of a weakening labor market, supporting the case for an interest rate cut, as low-interest rate environments typically support non-yielding bullion.

The value of both gold and silver has more than doubled over the past three years, as risks in geopolitical, economic, and global trade areas have increased, leading to higher demand for safe-haven assets.

U.S. President Donald Trump’s escalation of attacks on the Federal Reserve this year has raised concerns about the central bank's independence being jeopardized.

Trump and the dismissal of Lisa Cook

Markets are now awaiting a historic decision on whether Trump has legitimate reasons to dismiss Lisa Cook, a Federal Reserve governor. If this move is deemed legal, it would allow the president to replace her with an official who favors low interest rates.

Investors are also anticipating an announcement from the White House regarding the selection of the next Federal Reserve chair when Powell steps down in May. The Wall Street Journal has reported that Treasury Secretary Scott Piesen will begin interviews with candidates on Friday.

Separately, Trump declared that his administration would ask the Supreme Court to issue a ruling urgently, hoping to overturn a federal court decision stating that many of his tariff definitions were imposed illegally. This legal setback has increased uncertainty among U.S. importers and could delay the economic gains promised by the administration.

Silver outperforms gold

Silver has outshone gold's impressive performance in 2025. The metal's price has risen by about 40% so far this year, with its prices exceeding $40 an ounce on Monday for the first time since 2011.

Silver's value is rising due to its industrial applications in clean energy technologies, including solar panels. Under these circumstances, the market is heading for a fifth year of supply-demand mismatch, according to the Silver Institute.

Investors have flocked to silver-backed ETFs, expanding their holdings for the seventh consecutive month in August. This has led to a decline in available metal stocks in London, contributing to ongoing supply shortages in the market.

Lease rates - reflecting the cost of borrowing the metal, usually for a short period - remain high at around 2%, significantly above their normal levels close to zero.

As of 7:24 AM Singapore time, spot gold dropped by 0.1% to $3529 an ounce, after finishing Tuesday up by 1.6%. The Bloomberg Dollar Spot Index remained stable after rising by 0.5% in the previous session. Silver's price held steady at $40.88 an ounce. Platinum prices stabilized, while palladium prices increased.