Gold Pulls Back After Hitting Record High Amid Rate Cut Speculation and Tariff Concerns

• Gold hits record $3,508 amid rate cut bets, Trump tariff legal doubts.

• Fed rate cut speculation boosts gold; PCE inflation above 2%; dollar hits five-week low.

• Silver rose to $40.75/oz, platinum near $1,421, copper up on China stimulus hopes.

Gold prices briefly reached an all-time high on Tuesday, driven by ongoing expectations of U.S. interest rate cuts and growing uncertainty surrounding President Donald Trump’s trade tariffs. Spot gold surged 0.8% to a peak of $3,508.54 per ounce, while December gold futures climbed to $3,578.20 per ounce. By 03:27 ET, spot gold eased slightly but remained 0.2% higher at $3,482.28 per ounce.

The rally was fueled by an appeals court ruling that deemed Trump’s tariffs illegal but allowed them to remain in place until mid-October. Trump criticized the decision and vowed to take it to the Supreme Court, increasing doubts about the economic effects of the tariffs, many of which began in August. A potential court ruling against these duties could force the U.S. to renegotiate recent trade agreements.

Speculation of a Federal Reserve rate cut in September further bolstered gold and other precious metals despite persistent inflation concerns. Data showed the personal consumption expenditures (PCE) price index, a key Fed inflation indicator, remains above its 2% target. The CME FedWatch tool indicates nearly an 85% probability that the Fed will cut rates by 25 basis points this month.

Fed Chair Jerome Powell had previously hinted at a potential rate reduction but stopped short of a firm commitment due to sticky inflation. The prospect of easing rates caused the U.S. dollar to drop to a five-week low, which helped lift non-yielding metals like gold. Lower interest rates generally increase the appeal of precious metals compared to government bonds.

Silver and platinum also posted strong gains, continuing to outperform gold recently. Spot silver edged up 0.1% to $40.7545 per ounce after earlier surpassing 40 for the first time since 2011. Platinum rose 0.7% to $1,421.55 per ounce, nearing an 11−year peak.

These metals have attracted speculative interest due to historically lower prices relative to gold and recent gold price consolidation. In industrial metals, copper prices climbed on expectations of additional stimulus from China after weak purchasing managers index data. Copper futures on the London Metal Exchange increased 0.3% to $9,919 per ton, while COMEX futures rose 0.4% to $4.5905 per pound.