Gold/USD approaches record highs as Fed rate cut expectations build

Gold/USD advanced 0.8% to $2,585, nearing all-time highs as markets increasingly bet on Federal Reserve rate cuts beginning this week. The precious metal has gained 3.2% over the past five sessions, supported by a weakening US Dollar Index which fell to 100.50. Market participants are pricing in an 80% probability of at least a 25-basis-point cut at the upcoming FOMC meeting, with some expecting a more aggressive 50-basis-point reduction. EUR/USD rose to 1.1120 while USD/JPY retreated to 140.80, reflecting broad dollar weakness. Technical indicators show gold breaking above the $2,575 resistance level, with momentum indicators suggesting further upside potential toward $2,600. The metal's strength also reflects ongoing geopolitical uncertainties and persistent inflation concerns despite recent moderation. Traders are positioning for continued dollar weakness, which typically supports gold prices as the metal becomes cheaper for holders of other currencies.