Gold Nears Record, Silver Tops $40 as Fed Cut Bets Fuel Precious Metals Surge

Gold and silver are surging as renewed expectations of Federal Reserve rate cuts inject fresh momentum into an already powerful multiyear rally in precious metals.

Spot silver jumped as much as 2.6% on Tuesday to $40.76 an ounce, the highest level since 2011, extending its year-to-date gain to about 40%. Gold climbed as much as 1.2%, briefly approaching its April record above $3,500 an ounce. The metal also set a new high during a London Bullion Market Association auction on Monday. Both metals have more than doubled over the past three years, propelled by intensifying geopolitical tensions, trade frictions, and concerns over global growth.

The latest surge has been fueled by bets that the Fed will begin cutting interest rates when policymakers meet later in September. A key U.S. jobs report due Friday is expected to show further cooling in the labor market, bolstering the case for looser policy. “Gold and silver have suddenly sprung to life as both fundamentals and technicals aligned,” said Charu Chanana, market strategist at Saxo Capital. She noted that gold’s push through $3,450 and silver’s climb above $40 triggered a wave of momentum buying.

Silver’s rally was given extra impetus by news that Washington had added the metal to its list of critical minerals, alongside palladium, raising speculation it could be shielded from future trade frictions. O’Connell of StoneX called silver’s long-term outlook “extremely constructive” due to surging demand from green energy, artificial intelligence, and electrification trends, though she cautioned that the market may be due for a short-term pullback after its sharp advance.

Political uncertainty has further stoked haven demand. President Donald Trump’s repeated criticism of Fed officials, along with his recent attempt to oust Governor Lisa Cook, has fueled concerns about the central bank’s independence. A federal appeals court also ruled that Trump’s global tariffs had been illegally imposed under emergency powers, though the duties remain in effect while litigation continues.

By midday in New York, spot gold was up 1.6% to $3,536.33 an ounce, while silver traded at $40.91, adding 2.1% on the day. Platinum and palladium also jumped, rising 3.7% and 2.8% respectively.