Gold prices reached a record high above $3,600 an ounce, driven by expectations of U.S. rate cuts, concerns about Federal Reserve independence, and strong demand from investors and central banks. Spot gold was trading at $3,637.39, up more than 38% this year. Analysts predict prices could reach $4,000 next year.

A Reuters survey showed analysts expected gold prices to average $3,220 this year, up from $2,756 in January. The bearish dollar outlook, Fed rate cut expectations, and economic uncertainty are supporting gold prices. Traders see a 92% chance of a rate cut in September, further weakening the U.S. currency.

Trump’s criticism of the Fed and attempts to remove Governor Lisa Cook have raised concerns about the Fed’s independence, leading to increased gold purchases. Security concerns in the Middle East and between Russia and Ukraine, along with central bank gold purchases, are also boosting gold’s appeal.

Central banks are planning to increase their gold reserves while reducing dollar reserves over the next five years, according to the World Gold Council. Physically-backed gold exchange traded funds have seen significant inflows, with the SPDR Gold Trust holdings rising over 12% this year to 990.56 tons, its highest since August 2022.

Read more at Yahoo Finance: Gold rallies to new record on U.S. rate cut hopes, Fed tension