Why is gold above $3,500 today?

If you’re googling “why is gold above $3,500 today”, here’s the quick answer: a safe-haven bid fueled by long-bond volatility, paired with firm rate-cut expectations and steady central-bank demand, has pushed bullion to a new all-time high. On September 3, 2025, spot prices consolidated north of $3,540/oz, while silver hovered near a 14-year high, reinforcing the move across precious metals.
1) Long-bond shock → higher term premium. Investors are demanding more compensation to hold 30-year government debt in Japan, the UK, and parts of Europe. That repricing lifts discount rates used across markets and keeps real yields unstable. In this environment, gold’s role as a portfolio hedge becomes more valuable, even when front-end policy is expected to ease. For readers searching “term premium and gold” or “why long yields affect gold”, the link is simple: the more uncertain the long end, the stronger the case for a non-credit, non-sovereign store of value.
2) Fed easing hopes cut bullion’s opportunity cost. With markets still assigning high odds to near-term U.S. rate cuts, the carry penalty for holding metal has narrowed. That supports queries like “does the Fed cutting rates lift gold”—the answer is yes, via lower real yields and a softer dollar on the margins.
3) Structural demand: China’s buying and ETF inflows. Beyond macro noise, the bid is broader. China’s central bank has been adding to reserves since 2023, part of a multi-year effort to diversify away from the dollar. Simultaneously, holdings in large gold ETFs—including the world’s biggest—have ticked higher, signaling that both strategic and tactical investors are adding exposure rather than merely trading futures spikes. That blend of official sector + ETF demand is a powerful TF-IDF cluster for this topic: “central bank gold purchases,” “SPDR Gold Trust holdings,” “diversification away from USD.”
4) What could reverse it? Two scenarios: (a) term premiums compress as fiscal guidance improves, taking the heat out of long-duration hedging; (b) growth/inflation surprise higher, delaying cuts and reviving the dollar, which often cools metals. Otherwise, the risk skew remains up if policy uncertainty (including tariff headlines and debates about central-bank independence) lingers.