Gold surged to a record high on Tuesday, buoyed by a weakening U.S. dollar and growing market anticipation ahead of the Federal Reserve's policy meeting, where a 25-basis-point rate cut is widely expected.

Spot gold rose 0.5% to $3,696.34 per ounce, as of 8:09 a.m. ET (1209 GMT), after hitting a record high of $3,699.37 earlier in the session.

U.S. gold futures for December delivery rose 0.4% to $3,733.70.

The dollar fell to a more than two-month low against rivals. A weaker greenback makes gold less expensive for other currency holders.

"Global growth uncertainty and geopolitical risk continue to keep haven demand high but the gold rally is being driven largely by anticipation of aggressive rate cuts from the Federal Reserve," said Zain Vawda, analyst at MarketPulse by OANDA.

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"If the dot plot shows a shift to two rate cuts in 2025, this could fuel the gold rally and push it beyond the $3,700/oz mark with $3,800/oz a real possibility."

Traders are pricing in a near-certain 25 bps rate cut at the end of a two-day meeting on September 17, with a small chance of a 50-bps reduction, according to the CME FedWatch tool.

U.S. President Donald Trump in a social media post on Monday called for Fed Chair Jerome Powell to enact a "bigger" rate cut. Meanwhile, U.S. Senate narrowly confirmed Stephen Miran to the central bank's board of governors.

Non-yielding bullion tends to do well in a low-interest rate environment.

Commerzbank raised its gold price forecast to $3,600 per troy ounce by the end of this year and to $3,800 by the end of 2026.

Bullion has surged about 41% this year and notched multiple record highs on the back of sustained central bank purchases, diversification away from the U.S. dollar, resilient safe-haven demand amid geopolitical and trade frictions.

Elsewhere, spot silver was up 0.2% at $42.81 per ounce, the highest level since September 2011. Platinum gained 0.6% to $1,407.70 and palladium rose 1.6% to $1,203.19.