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Gold and silver prices climb to record highs ahead of Fed meeting

Published: 02 Sep. 2025, 19:23

A Korea Gold Exchange staff member shows gold bars at the company's Jongno District office in central Seoul on Aug. 26. [YONHAP]

Gold and silver prices continued their rally to record highs as expectations mount that the U.S. Federal Reserve will cut interest rates at the upcoming Federal Open Market Committee (FOMC) meeting scheduled for Sept. 16 to 17.

Gold futures for the nearest delivery closed at $3,551.82 per ounce on the New York Mercantile Exchange on Monday, up 1.13 percent from the previous day. It was the highest closing price since April 22 and set a new all-time high for this year. Early trading on Tuesday saw prices rise further to $3,565.50 per ounce.

Lower interest rates typically weaken the dollar, increasing demand for safe-haven assets like gold and silver.

Gold prices previously surged to around $3,425 per ounce in April amid a spike in safe-haven demand after U.S. President Donald Trump declared a global tariff war. Prices later fluctuated due to delayed tariffs and trade negotiations. But with a Fed rate cut now seen as likely, gold has broken out of its trading range and resumed its upward climb.

"Gold futures set a fresh record high on intensifying concerns around the U.S. Federal Reserve’s independence, mounting interest-rate-cut bets and tariff uncertainty," The Wall Street Journal reported Monday.

"Fed Chair Jerome Powell had opened the door to monetary policy easing in a speech to the Jackson Hole symposium on Aug. 22, with markets now broadly expecting a rate cut in September."

A Korea Gold Exchange staff shows silver bars at the company's Dongjak District office in southern Seoul on Feb. 16. [YONHAP]

U.S. President Donald Trump speaks to the press during a bilateral meeting with President Lee Jae Myung in the Oval Office of the White House in Washington on Aug. 25. [AFP/YONHAP]

Some analysts say ongoing pressure from Trump is also fueling the rally. Since taking office, Trump has repeatedly called for lower interest rates, and in August, he abruptly notified Fed Governor Lisa Cook of her dismissal. Market observers say this suggests an aggressive attempt by Trump to assert control over the Fed, raising concerns about central bank independence.

Christine Lagarde, president of the European Central Bank, said that the impact on the stability of the U.S., and ultimately the global economy, that Trump's series of measures against the Fed could be "very worrying."

The Wall Street Journal also commented that, “The move potentially undermines the credibility of the Fed’s independence in the eyes of the market, raising safe-haven demand for gold and posing headwinds to the U.S. dollar."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY BAEK MIN-JEONG [[email protected]]