Gold briefly hit a record high as the prospect of US interest-rate cuts and growing concerns over the Federal Reserve's future lent fresh impetus to the multiyear rally in precious metals.

Bullion for immediate delivery rose as much as 0.9% on Tuesday to top $3,508 an ounce - surpassing the previous peak reached in April - before paring gains as the dollar rallied. The precious metal has risen more than 30% this year, making it one of the best-performing major commodities.

The latest run has been fueled by expectations the US central bank will lower interest rates this month, after Fed Chair Jerome Powell cautiously opened the door to a reduction. A key US jobs report this Friday is likely to add to signs of an increasingly subdued labor market - supporting the case for rate cuts. That has boosted the allure of precious metals, which don't pay interest.

Agencies

"Investors adding to gold allocations, especially as Fed rate cuts loom, are pusG strategist Joni Teves said. "Our base case is that gold continues to make new highs over the coming quarters. A lower interest rate environment, softer economic data and continued elevated macro uncertainty and geopolitical risks boost gold's role as a portfolio diversifier."

Both gold and silver have more than doubled over the past three years, with mounting risks in the spheres of geopolitics, the economy, and global trade driving increased demand for the time-honored haven assets.