Gold Hits All-Time High as Rate Cuts Loom: What’s Fueling the Rally

Gold Prices Soar to Record High on Rate Cut Hopes

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: September 23, 2025

Summary: Gold has reached its all-time high amid the rate cuts. Let’s know what’s influencing this surge

Gold just broke into uncharted territory, touching ~$3,759 per ounce before settling slightly lower. Investors are pushing prices higher as they bet that U.S. interest rates are coming down and that the dollar might weaken further.

What’s Driving the Surge

Rate Cut Expectations

With inflation cooling slowly and economic data showing soft spots, markets are increasingly confident the U.S. Federal Reserve will approve more rate cuts. One cut already happened, and traders see a strong chance of another in October, and possibly more before year-end. Because gold doesn’t yield interest, it becomes more attractive when borrowing costs fall.

Weakening U.S. Dollar

A softer greenback makes gold cheaper for holders of other currencies. That gives international demand a boost.

Inflation & Economic Uncertainty

Gold is always a go-to when people worry inflation will stick around or political/geopolitical tensions worsen. Central banks are also snapping up gold, which adds momentum.

Eyes on Fed Signals

Everyone’s waiting for Federal Reserve Chair Jerome Powell’s next speech for clues: how fast cuts will happen, how carefully the Fed will manage inflation vs job growth.

What Could Pull It Back

Even as gold gallops upward, there are risks:

If the Fed signals that inflation isn’t under control, or that they can’t ease quickly, gold could drop.
A sudden strong dollar would make gold less attractive.
Profit taking could also cause temporary pullbacks — gold has already rallied hard this year (~40–42%).