Gold and Silver haven’t lost a beat in the first week of September - gold has hit a new record of $3,549/oz and silver has climbed to $41.14/oz, its highest level since September 2011.
Let’s take a look at some of the reasons for gold and silver’s record run.
US Tariffs – US President Trump’s erratic tariff policy has seen the US impose and often cancel tariffs, creating massive uncertainty about US trade policy. This has caused strong volatility in the global financial markets and damaged the credibility of the United States, in turn weighing on the US dollar. Investors have sought safety away from the US Dollar and gold and silver have been popular alternatives.
Federal Reserve rate cut expectations – The Fed has held rates since December 2024 and is widely expected to lower rates later this month. A lower interest rate environment makes the Dollar less attractive and typically boosts gold and silver, which are non-yielding assets.
Trump and the Fed - President Trump’s demand that the Federal Reserve to lower rates, including personal attacks on Fed Chair Jerome Powell, have put into question the independence of the Fed, undermining the credibility of the US central bank. This has made gold and silver more attractive.
Broad Dollar Weakness - The US dollar has posted losses against every major currency since January 1, 2025. Gold and silver typically have an inverse correlation with the US dollar, which means that the Dollar moves in opposite direction to gold or silver. When the Dollar is lower, international buyers need less of their home currency to buy gold or silver, which raises demand for these metals and pushes their prices higher.
Central bank purchases – This factor is particular to gold, as central banks across the globe have accelerated their purchases of the yellow metal over the past several years. This signals weaker confidence in the US Dollar in favor of gold, the world’s oldest and possibly most reliable safe haven.
Nobody knows for sure which direction gold and silver will take in September, but the factors discussed above which have driven the two metals higher could well continue in the month of September.
Central banks continue to stockpile gold, US tariffs continue to create uncertainty, the Fed is virtually certain to lower rates at the September meeting and the Trump-Fed feud won’t end even after a September rate cut.
These factors are likely to be in play in the coming weeks which would suggest that the impressive rallies in gold and silver could continue in September. A possible wrinkle to gold and silver moving higher would be stronger-than-expected employment and inflation reports – such a scenario would be bullish for the US dollar and would likely weigh on the price of gold and silver.