Gold Climbs to Record High as Fed Independence Faces Political Fire

Gold prices surged to a record high of $3,599.89 per ounce on Friday, driven by expectations of a Federal Reserve rate cut in September following weaker-than-anticipated U.S. jobs data. Spot gold climbed 1.4% to a new peak, while U.S. gold futures for December delivery settled at $3,653.30. The rally continued as the labor market showed signs of cooling, with the unemployment rate rising to 4.3%, the highest level since 2021. This data has intensified speculation that the Fed will lower interest rates at its September 17 meeting, with traders pricing in an 84% chance of a 25 basis-point cut and a 16% chance of a 50 basis-point cut.

The precious metal has gained over 36% this year, supported by a weakening dollar, geopolitical tensions, and strong safe-haven demand. Analysts noted that gold’s performance is closely tied to the Fed’s monetary policy and the ongoing political pressures on its independence. U.S. President Donald Trump has repeatedly criticized the central bank and its leadership, including recent actions against Fed Governor Lisa Cook. Such developments have raised concerns about the Fed’s autonomy and the stability of dollar-denominated assets, further boosting gold’s appeal.

Gold’s trajectory has also been influenced by broader economic uncertainties and a shift in central bank reserves away from the U.S. dollar. Central banks, particularly in emerging markets, have increased their bullion holdings, adding to sustained demand. Analysts at Goldman Sachs highlighted that if Trump continues to challenge the Fed’s independence and exerts significant influence over its policies, investor confidence in the dollar could decline further. In such a scenario, gold could realistically reach $5,000 per ounce, according to the firm.

Market participants are now closely watching the upcoming nonfarm payrolls data for further clarity on the size and timing of potential rate cuts. The dollar has weakened against major currencies, making gold more affordable for international buyers. Meanwhile, analysts remain cautious about gold reaching $4,000 per ounce without a major market disruption. Tai Wong, an independent metals trader, noted that while the outlook for gold is bullish, a significant move toward $4,000 would require a “massive dislocation” in global markets.

Physical demand for gold, especially in key consumer markets like China and India, has softened due to record prices. However, central banks continue to buy bullion, supporting long-term price momentum. Gold’s performance is expected to remain tied to the Fed’s policy decisions, the trajectory of the U.S. dollar, and the broader geopolitical landscape. As the world’s largest economy faces labor market and economic headwinds, the yellow metal is likely to remain a preferred safe-haven asset in the short to medium term.

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[1] Gold price jumps to new high on US jobs report (https://www.mining.com/gold-price-makes-new-high-with-3600-in-touching-distance/)

[2] Gold price hits a new record high on a weaker dollar and ... (https://www.cnn.com/2025/09/02/business/gold-price-record-dollar-interest-rates-intl)

[3] Gold nears record $3600/oz level as weak U.S. jobs data ... (https://www.cnbc.com/2025/09/05/gold-heads-for-best-week-in-three-months-ahead-of-us-jobs-data.html)