On Tuesday, gold prices reached an unprecedented high, buoyed by a declining dollar in anticipation of the Federal Reserve’s policy meeting scheduled for this week, during which the central bank is largely anticipated to implement a reduction in borrowing rates. Spot gold experienced an increase of 0.1%, reaching $3,680.17 per ounce as of 0109, following its earlier achievement of a record high at $3,689.27 during the session.

U.S. gold futures designated for December delivery remained unchanged at $3,718.80. The dollar was observed trading in proximity to a 2-1/2-month low against the euro, while also nearing a 10-month trough in relation to the risk-sensitive Australian dollar. A depreciated dollar renders gold more affordable for holders of alternative currencies. On Monday, U.S. President Donald Trump took to social media to urge Fed Chair Jerome Powell to implement a “bigger” reduction in benchmark interest rates.

Market participants are factoring in a highly probable 25-basis-point reduction in interest rates at the conclusion of the two-day meeting scheduled for September 17. Additionally, there exists a marginal possibility of a more substantial 50 bps cut. Lower interest rates diminish the opportunity cost associated with holding non-yielding bullion. SPDR Gold Trust, recognized as the world’s largest gold-backed exchange-traded fund, reported an increase in its holdings of 0.21%, rising to 976.80 tonnes on Monday from 974.80 tonnes on Friday. In a notable development on Monday, a U.S. appeals court denied Donald Trump’s attempt to dismiss Fed Governor Lisa Cook.

This ruling represents the latest chapter in an ongoing legal struggle that poses a significant challenge to the Federal Reserve’s enduring autonomy. In other markets, spot silver remained unchanged at $42.71 per ounce, while platinum experienced a slight decline of 0.1%, settling at $1,399.40. Conversely, palladium saw an increase of 0.4%, reaching $1,188.59.