Gold Prices Surge to Record High, Investors Advised to Keep at Least 10% in Gold Amid Market Uncertainty

Gold prices have risen to a record high of $3,578 amid concerns about the US economy and expectations of a Federal Reserve rate cut. An investor who bought a 1-ounce gold bar at Costco a year ago would have paid $2,495 and seen a one-year gain of about 42%, or over $1,000 in dollar terms.

Gold prices have surged to a record high of $3,578 an ounce, driven by concerns over the US economy and expectations of a Federal Reserve rate cut. This marks a significant increase from the price of $2,495 an ounce seen a year ago, resulting in a one-year gain of approximately 42% or over $1,000 in dollar terms for an investor who bought a 1-ounce gold bar at Costco [1].

The rally in gold prices comes amid global uncertainty and alarm over Donald Trump’s policies, which have led investors to seek safe-haven assets to protect against inflationary and geopolitical risks. The price of gold has nearly doubled since 2023, with investors turning to gold as a hedge against inflation and geopolitical risks. Central banks, including those of India, China, Turkey, and Poland, have been adding gold to their reserves, highlighting the metal's appeal in uncertain times [1].

The Federal Reserve's balance sheet lists gold certificates held by the Treasury, nominally valued at approximately $11 billion. However, based on the current actual spot price, the real value of this gold is as high as $675 billion. This has led to discussions about the potential for the US to establish a strategic bitcoin reserve by selling part of its gold reserves. Republican Senator Cynthia Lummis from Wyoming plans to promote a bitcoin bill when the new Congress takes office next year, aiming to purchase 1 million bitcoins without increasing the federal government deficit [2].

The US dollar has been under selling pressure as expectations of an interest rate cut at the Federal Reserve’s September meeting have increased, with markets seeing a 90% probability of a quarter-point reduction. This has contributed to the rise in gold prices as investors seek alternatives to the US dollar [1].

US Treasuries advanced on Wednesday, pushing their yields lower, after data showed job openings fell in July, reflecting a softening labor market. This data reinforced expectations of an interest rate cut by the Federal Reserve later this month. The benchmark 10-year yield fell 6 basis points to 4.217%, while the two-year yield slid 4.1 basis points to 3.617% [3].

The combination of geopolitical risks, concerns over the US economy, and expectations of a Federal Reserve rate cut have driven gold prices to new heights. As investors continue to seek safe-haven assets, gold is likely to remain a favored option. However, the potential for the US to establish a strategic bitcoin reserve by selling part of its gold reserves could introduce new dynamics to the gold market.

References:
[1] https://www.theguardian.com/business/2025/sep/02/gold-price-record-high-bullion-donald-trump
[2] https://www.moomoo.com/news/post/17884834/record-tr4cking-news-alphabet-apple-macy-s-dollar-tree-campbell-s-figma-biggest
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3UQ0QU:0-us-bonds-rally-as-jobs-data-backs-fed-rate-cut/