By Yihui Xie and Jack Ryan

(Bloomberg) -- Gold hit another fresh record, as investors bet on a Federal Reserve rate cut this week and weighed the scope for more monetary easing in coming months.

Bullion neared $3,700 an ounce — surpassing Monday’s all-time high — supported by a gauge of the US dollar falling to the lowest in more than 10 weeks. While a rate cut this week is priced in by markets, the Fed will also release its quarterly update of economic and rate forecasts, dubbed the dot plot, and Chair Jerome Powell will hold his post-decision press conference.

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A string of weak labor data and no major inflation surprises have boosted prospects for further rate cuts this year. That would be positive for gold, which doesn’t pay interest.

Meanwhile, US President Donald Trump’s mounting pressure on the Fed, including his effort to oust Governor Lisa Cook, has reinforced bets on more dovish monetary policy. In addition, the administration’s economic advisor Stephen Miran is on his way to joining the central bank as soon as Tuesday.

Gold has surged by more than 40% this year, outpacing major assets such as the S&P 500 index, and recently surpassed its inflation-adjusted peak reached in 1980. Persistent trade and geopolitical uncertainties, along with purchases by central banks and inflows into exchange-traded funds, have added to the momentum. Goldman Sachs Group Inc. has forecast bullion could approach $5,000 an ounce if just 1% of privately-held Treasuries shift to the precious metal.

Gold rose 0.5% to $3,698.58 an ounce as of 10:59 a.m. London time, after earlier hitting a record $3,698.96. That followed a 1% gain on Monday. The Bloomberg Dollar Spot Index fell 0.3%. Silver reached the highest price in 14 years, while platinum was flat and palladium rose.

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