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• Gold price drifts higher to around $3,750 in Tuesday’s early Asian session.
• Expectations of more US interest rate cuts and persistent political uncertainty continue to boost demand for Gold. 
• Traders await the Fed’s Powell speech later on Tuesday for fresh impetus. 

The Gold price (XAU/USD) gains momentum to near an all-time high of around $3,750 during the early Asian session on Tuesday. Growing expectations of further US Federal Reserve (Fed) rate cuts and persistent safe-haven demand amid political uncertainty underpin the precious metal. 

The US Fed decided to cut its benchmark rate by 25 basis points (bps) last week, the first rate cut of 2025. This decision was supported by signs of a softening labor market and concerns about employment risks, despite inflation remaining somewhat elevated. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Fed Governor Stephen Miran last week voted against the quarter-percentage-point reduction in favor of a steeper 50 bps rate cut, saying that the central bank should cut interest rates aggressively to reduce risks to the economy's outlook.

Rising geopolitical risks also boost the safe-haven flows, supporting the yellow metal. Reuters reported on Tuesday that Russia's defence ministry said that its forces had taken control of the settlement of Kalynivske, in Ukraine's Dnipropetrovsk region.

"There's a continued flow of safe haven demand amid geopolitical matters that are still kind of wobbly, including the Russia-Ukraine war. Last week's Fed interest rate cut and probably more Fed rate cuts coming by the end of the year are also supporting prices," said Jim Wyckoff, senior analyst at Kitco Metals.

Traders will closely monitor a series of Fed speeches later this week, including remarks from Fed Chair Jerome Powell on Tuesday. His comments might offer some hints about the US monetary policy path. Any hawkish remarks from Fed officials could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term. 

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