Gold prices surged to unprecedented levels on Monday, driven by a weakening US dollar and falling Treasury yields, as investors closely monitor this week’s Federal Reserve meeting that could shape financial markets for the remainder of the year.

Spot gold reached USD 3,718 per ounce, after briefly touching a record USD 3,682 earlier in the session. US gold futures for December delivery rose 0.9 percent to USD 3,720.40.

The rally coincided with a 0.3 percent decline in the dollar index to a one-week low, boosting gold’s appeal for international buyers, while yields on 10-year US Treasury bonds dropped.

Markets are almost certain that the Fed will implement a 25-basis-point rate cut on Wednesday, the first reduction since December. Some traders, however, are watching for the possibility of a larger 50-basis-point cut.

Peter Grant, senior metals strategist at Zaner Metals, said, “Expectations for a 25-basis-point rate cut are largely priced in at this stage,” adding that additional cuts may follow before the end of the year. Grant identified short-term upside targets for gold at USD 3,700, USD 3,730, and USD 3,743 per ounce.

Bullion, which does not generate yield and is widely considered a safe-haven asset, typically performs well in low-interest-rate environments, further supporting the price surge.

Other precious metals also saw gains: spot silver rose 1 percent to USD 42.60 per ounce, platinum increased 0.4 percent to USD 1,396.74, while palladium declined 0.9 percent to USD 1,186.17.

Investors now await the Fed’s announcement, with markets sensitive to signals on the pace of future rate cuts and broader economic guidance.