Gold has surged to its highest level ever as global uncertainty drives demand for secure assets. On Tuesday morning, the spot price climbed to $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 value when markets face instability. Earlier this year, its price jumped after President Donald Trump introduced 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, further boosting gold’s appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies were central to the surge. He pointed to the impact of geopolitics and trade conflicts. Ash also noted that last year’s US election added momentum to the rally.
Federal Reserve under scrutiny
Concerns about the Federal Reserve’s independence are also 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 investor confidence. He explained this drove buyers toward safe haven assets like gold. On Monday, European Central Bank president Christine Lagarde warned of serious risks. She said political interference in the Fed would threaten global economic stability.
Lagarde stressed that such moves could destabilise the US and ripple across world markets.
Asian demand remains strong
Ash noted that gold rallies often slow when jewellery buyers in China and India cut back. Both countries are major markets for gold jewellery. Normally, higher prices discourage buying.
This time, demand remains robust. Buyers in China and India are shifting from jewellery to investment products such as bars and coins. Their continued interest supports gold’s rise, even at record-breaking levels.
