09:09 AM EDT, 09/16/2025 (MT Newswires) -- Gold continued its record run up early on Tuesday as the Federal Reserve's policy committee begins a two-day meeting that is expected to end with the central bank's first cut to interest rates this year.

Gold for December delivery was last seen up US$8.60 to US$3,723.60 per ounce, rising off Monday's record close.

The Federal Open Market Committee is widely expected to cut U.S. interest rates by 25 basis points even as inflation sticks above the central bank's 2% target. However the labor market is weakening amid a slowing economy, with new hiring slowing and initial jobless claims last week rising to the highest in four years.

Supported by the prospect of lower rates, a dollar trading near a four-year low and physical demand, gold has gained 10% over the past month and 41% since the start of the year.

"Gold extended its recent run of strong gains to a fresh record ... supported by a softer dollar and yields ahead of Wednesday's US rate decision. Traders are so far relaxed about the risk of a short-term "sell the fact" reaction, with lower funding costs, strong ETF and Asian demand underpinning prices," Saxo Bank wrote.

The dollar weakened early, with the ICE dollar index last seen down 0.25 points to 97.06. Treasury yields edged higher, with the U.S. two-year note last seen up 0.4 basis points to 3.549%, while the 10-year note was paying 4.06%, up 1.5 points.