Gold has surged to its highest level ever as global uncertainty drives demand for security. On Tuesday morning, the spot price reached $3,508.50 per ounce. The rally has lifted the metal by nearly a third since the start of the year.
Trade tensions fuel rally
Gold usually gains when markets face instability. Earlier this year, prices spiked after President Donald Trump imposed sweeping tariffs. The measures disrupted global trade and encouraged investors to seek safer assets. Analysts also expect the US central bank to cut interest rates, boosting gold’s appeal further.
Adrian Ash, research director at BullionVault, said Trump’s policies were central to the surge. He pointed to the impact of global trade disputes and shifting geopolitics. Ash also noted that last year’s US election added momentum to the rally.
Federal Reserve under scrutiny
Analysts say concerns over the Federal Reserve’s independence are driving gold higher. Trump has repeatedly criticised Fed chair Jerome Powell. He even attempted to remove governor Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s pressure weakened confidence in the Fed. He explained this pushed investors toward safe haven assets like gold. On Monday, European Central Bank president Christine Lagarde issued a warning. She said political interference with the Fed would pose a serious threat to global stability.
Lagarde stressed that such influence could destabilise the US economy and ripple through international markets.
Asia keeps demand strong
Ash noted that gold rallies often slow when jewellery buyers in China and India reduce purchases. Both countries are major markets for gold jewellery. Normally, rising prices reduce buying.
This time, demand remains firm. Buyers in China and India are turning from jewellery to investment products such as bars and coins. Their continued interest sustains gold’s rise, even at record-breaking levels.
