On September 2, gold prices $ETFS Physical Gold(GOLD.AU)$ smashed another all-time high. Backed by rising expectations of Fed rate cuts and growing worries about central bank independence, precious metals have extended their multi-year rally and just got another leg up.
With U.S. markets closed on Monday, spot gold surged during Tuesday’s Asian session—jumping 0.9% to nearly $3,510/oz, breaking the previous April peak. So far this year, gold has already gained more than 30%, making it one of the best-performing commodities of 2025.
Powell’s dovish tone, steady PCE, and rate-cut bets fuel gold
Gold has always been the go-to safe haven in times of political and economic turmoil—especially in a low-rate environment. This year, Trump’s escalating trade war has stirred global market volatility, driving investors to pile into gold. On top of that, his repeated public attacks on the Fed have raised concerns about the central bank’s independence, shaking confidence in the U.S. dollar.
After Fed Chair Jerome Powell opened the door to rate cuts, markets now widely expect a September move. Last Friday’s PCE inflation report came in right on target. Since the Fed watches PCE closely, the lack of a surprise only reinforced the view that September cuts are fully priced in.
ETF flows confirm the bullish mood: gold ETF holdings just posted their biggest weekly increase since April. With the $3,500 barrier taken out, more capital is expected to flow into gold ETFs, futures, and spot markets. Over the past three years, both gold and silver prices have doubled, fueled by geopolitical tensions, economic uncertainty, and ongoing trade risks.For example, the world’s largest gold ETF, SPDR Gold Trust $SPDR Gold Shares(GLD)$ , is now approaching its own record high.
Source: World Gold Council
Silver jumped first
Silver $iShares Silver Trust(SLV)$ has been even stronger this year. It’s up more than 40% YTD and already broke through $40/oz in Monday’s Asian session—the highest in 14 years.
Source: TradingView
Silver’s appeal goes beyond its safe-haven role. Its industrial demand—especially in solar panels and other clean-energy tech—has given it an extra boost. According to the Silver Institute, the market is heading for a fifth straight year of supply shortages.
A weaker U.S. dollar has also improved purchasing power in key consuming countries like China and India. Investor appetite for silver ETFs $iShares Silver Trust(SLV)$ keeps rising—August marked the seventh consecutive month of inflows. Meanwhile, London silver inventories keep shrinking, and leasing rates remain elevated at around 2% (normally close to zero). That shows just how tight the physical market is.
Policy support is also adding fuel. The U.S. recently added silver to its official list of “critical minerals” (joining palladium), raising concerns about possible tariffs or supply restrictions.
Technical picture: Gold flips from bearish to bullish
For most of August, gold looked heavy, even threatening to test the bottom of its April trading range. The turning point came on August 22, when Powell’s Jackson Hole speech stressed that cooling inflation and a weakening labor market might soon force a policy shift to avoid employment losses.
The U.S. dollar plunged, and gold and silver spiked that day. Short positions were forced to cover, triggering widespread stop-outs. By the close, gold had flipped from bearish pressure into a full-blown bullish breakout.
From there, momentum snowballed: gold strung together five straight sessions of higher highs and higher lows. Once it cleared the top of the trading box, breaking the $3,500 mark was just a matter of time.
If last Friday’s close at $3,490 still looked range-bound, Monday’s powerful breakout changed everything. At this point, any remaining shorts should already have stopped out.
Source: TradingView
What risks to watch now?
Despite the strong uptrend, traders need to keep an eye on this Friday’s nonfarm payrolls. With rate cuts fully priced in, “good news” for the economy won’t move gold much higher, but “bad news” could trigger sharp downside moves.
If payrolls come in strong, gold could retrace back to recent support levels. That said, it’s unlikely to derail the longer-term bullish trend, which is supported by fundamentals, technicals, and flows into ETFs and futures.
Invesight Viewpoint
Gold’s powerful breakout above $3,500 marks a historic milestone and likely the start of a new bullish leg. The rally is being driven by a perfect storm of factors: dovish Fed expectations, geopolitical uncertainty, trade risks, and a decisive technical breakout.
Since late August, gold has shaken off weakness, flipped the script, and pushed through key resistance levels. With strong fundamentals and money still pouring into gold and silver markets, the trend looks set to continue.
Still, short-term risks remain—especially around Friday’s jobs data. Traders should be ready for pullbacks but keep the bigger picture in mind: the gold bull market is alive and kicking.
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