Sign Up Log in

    Lower short-term rate expectations boost gold prices to a record high above US$3505

    by VT Markets
    /
    Sep 2, 2025
    Gold has reached an all-time high, surpassing US$3505, driven by expectations of lower short-term interest rates. UBS still predicts gold will hit US$3700. ANZ suggests keeping an eye on the upcoming jobs report for market insights. With gold now above US$3505, this surge is largely due to strong beliefs that central banks will reduce short-term interest rates soon. Lower rates make gold, which does not offer yields, more appealing to investors. This positive sentiment supports higher prices. Recent economic data from August 2025 shows Core CPI cooling to a 2.1% yearly rate. The futures market indicates an 85% chance of a rate cut at the next Fed meeting. This reinforces the case for investing in gold. For traders, buying call options is a smart way to show a bullish outlook while managing risk. Major banks are setting targets up to US$3700, and call options provide leveraged exposure to that potential rise. This allows traders to join the ongoing trend. Gold proved resilient during the aggressive rate hikes of 2023, maintaining a solid floor above US$1900. Its strong performance in a high-rate environment boosts our confidence now that the policy direction is changing. The path ahead seems to be upward. However, we need to pay close attention to this week’s jobs report, as it poses a significant short-term risk. A much stronger-than-expected employment figure could delay the anticipated rate cuts and cause a quick price drop. Buying near-term put options might be a wise way to protect existing long positions from this risk. Implied volatility in gold options has reached a six-month high before this important data release. This makes selling premium an appealing strategy for those who think prices may stabilize. A covered call strategy against a long futures position could generate income while waiting for the next big move.

    here to set up a live account on VT Markets now

    In This Article

    see more

    Back To Top
    server
    Click Click Click Click Click
    Follow us on

    Hello there 👋

    How can I help you?

    Chat with our team instantly

    Live Chat

    Start a live conversation through...

    • Telegram
      hold On hold
    • Coming Soon...

    Hello there 👋

    How can I help you?

    telegram

    Scan the QR code with your smartphone to start a chat with us, or click here.

    Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

    QR code