Gold surged to a new record level and is set to register its best monthly performance in 14 years.

Spot gold rose about 1% to reach $3869.75 per ounce.

The precious metal has increased by 11.4% so far in September, heading for its best month since August 2011.

December futures for gold in the U.S. rose 0.4% to $3872.

Recent economic data have increased expectations that the Federal Reserve (the U.S. central bank) will implement further interest rate cuts this year. Traders see about an 89% chance of a 25 basis point rate cut at the next Fed meeting.

Gold, often used as a safe haven during times of political and financial uncertainty, thrives in a low interest rate environment.

As for other precious metals, silver remained steady at $46.95 per ounce in spot trading, platinum fell 0.2% to $1597.58, and palladium dropped 0.8% to $1259.02.