Gold surges to record high, analysts now eye $3,700 target; silver set to rally to $48. Gold prices surged to an all-time high on Tuesday, extending gains to the sixth consecutive session amid a softer dollar and growing expectations of a US interest rate cut later this month.

Spot gold rose 0.5 per cent to $3,492.26 per ounce as of 0157 GMT, after briefly touching a record $3,508.50. Meanwhile, US gold futures for December delivery climbed 1.4 per cent to $3,563.40.

The recent rally in precious metals reflects investor caution amid a weakening economic backdrop and anticipation of policy easing by the Federal Reserve. Concerns over the independence of the US central bank have also weighed on confidence in dollar-denominated assets. President Donald Trump has repeatedly criticised the Fed and its chair, Jerome Powell, for not lowering interest rates, including remarks over an expensive renovation at the central bank’s Washington headquarters.

On Monday, Treasury Secretary Scott Bessent defended the Fed’s independence while acknowledging past mistakes and supported Trump’s decision to remove Fed Governor Lisa Cook over allegations of mortgage fraud.

While gold continued its upward trajectory, silver prices saw a correction, slipping 1.5 per cent to $40.61 per ounce after reaching the highest level since September 2011 in the previous session.

Outlook for Gold and Silver Prices
Sandip Raichura, CEO of Retail Broking and Distribution & Director at PL Capital, said gold is expected to emerge strong from the current volatility, targeting $3,700 per ounce in the medium term. He added that silver, having breached its earlier resistance at $34, is likely to move toward $42 and eventually $48 per ounce.

"We have continued our bullish stance on Gold for more than 2 years now, predicated on the weakness of the DXY as well as the de-dollarisation trend gaining strength, especially post the incumbent US president taking over. In addition, recent tariff actions against India and Brazil by the US Trade agencies and the consequent potential for a different trade regime, an alternative power centre for global exports, is likely to spur weakness in the US dollar going ahead, which is commodity positive generally and specifically gold," he stated.

Meanwhile, NS Ramaswamy, Head of the Commodity Desk and CRM at Ventura, said gold futures could see an additional 2 to 3 per cent upside by the end of 2025, with prices ranging between $3,600 and $3,680 per ounce.

“Gold continues to remain an attractive buy due to the reduced opportunity costs of holding the non-yielding asset at a lower borrowing cost. US job data (non-farm payrolls) slated for coming Friday (5th September) could strengthen the case for a rate cut and near-term easing if it turns out weak. Trade policy uncertainty is further supporting the safe-haven flows. The uptrend seen in gold coincides with continued gold purchases by China’s central bank,” he explained.

Ramaswamy also noted that silver is trading at its highest level since August 2024, having reached a 14-year high. Stronger Chinese industrial activity, indicated by a robust PMI for August, is supporting industrial demand for silver. He projected silver futures could rise to $43-$45 per ounce by December 2025, offering a potential upside of 4 to 7 per cent.

Courtesy : Livemint