The spot price for gold climbed over 1% to hit a peak of £2,709 during the session. The rally is underpinned by widespread expectation that the Fed will ease monetary policy at its next meeting on Tuesday, September 17. According to CME Group’s FedWatch tool, traders are pricing in a near 90% probability of a rate cut this month, further bolstering demand.

This recent surge is part of a longer-term trend that has seen gold’s value more than double in the last three years, driven by geopolitical and economic uncertainty increasing its appeal as a safe-haven asset.

Adding to market sensitivity are concerns over the US central bank’s independence, heightened by President Donald Trump’s public pressure for rate cuts. Investors are also closely watching a landmark legal ruling on whether the president has the authority to dismiss a board member, which could pave the way for a new appointment more sympathetic to looser policy.

Lower interest rates typically boost gold, which as a non-yielding asset becomes more attractive when returns on bonds fall. A rate cut also tends to weigh on the US dollar, making bullion cheaper for holders of other currencies.

Looking ahead, analysts at Goldman Sachs have suggested that should concerns over the Fed’s independence intensify, the price of gold could climb as high as $5,000 (c. £3,700) an ounce as investors reallocate funds from US Treasuries.