Gold Prices Reach US$3,758.4/oz; Fed Rate Cuts Drive Demand

Gold prices rose on Sep. 22, 2025, driven by expectations of further interest rate cuts by the US Federal Reserve (Fed), while silver surged to its highest level in 14 years. US gold futures for December 2025 delivery increased 1.4% to trade at US$3,758.4/oz. Spot silver climbed 1.4% to US$43.67/oz, its highest price since 2011. Other precious metals also advanced, with platinum gaining 0.8% to US$1,415.09 and palladium rising 1.9% to US$1,170.63. 

Market sentiment is being influenced by the Fed's recent policy shift. The central bank implemented its first rate cut since December 2024, reducing rates by 25 basis points and signaling openness to further easing. Investors are now pricing in a 93% probability of another 25-basis-point cut in October and an 81% probability of an additional cut in December, reports El Economista. 

"I would expect gold to reach new all-time highs this week, as it is likely that Fed officials will indicate new rate cuts, but the pace and magnitude of the reductions will also depend on the data," said Giovanni Staunovo, Analyst, UBS. 

Investors are closely monitoring upcoming speeches from several Fed officials this week, including a speech by Chairman Jerome Powell, for further clues on the future direction of monetary policy. The market will also be monitoring the release of the US Personal Consumption Expenditures (PCE) price index data on Friday for signals on inflation.

Central Bank Buying Underpins Multi-Year Rally

With Monday’s move, gold has now risen by more than 41% in 2025, continuing a multi-year rally that can be traced back to the start of the Russia-Ukraine conflict in 2022, reports mining.com. According to data from Metals Focus, net purchases by global central banks have exceeded 1,000t each year since 2022, and the consultancy expects another 900t to be added this year.