Gold has reached a historic peak as investors search for stability in unsettled markets. On Tuesday morning, the spot price rose to $3,508.50 per ounce. The rally has driven the metal up by nearly a third this year.
Tariffs and trade tensions boost interest
Gold often gains when the global economy faces disruption. Earlier this year, prices jumped after President Donald Trump introduced sweeping tariffs. The measures unsettled global trade and increased demand for safer assets. Analysts also expect the US central bank to cut interest rates, adding to gold’s appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies created conditions for the surge. He pointed to the impact of geopolitics and shifting trade flows. Ash also highlighted that last year’s US election gave the rally added strength.
Federal Reserve faces political pressure
Analysts warn that concerns over the Federal Reserve’s independence are also driving gold. Trump has repeatedly criticised Fed chair Jerome Powell. He even tried to remove governor Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s pressure on the Fed undermined confidence. He argued that investors turned to safe havens like gold. On Monday, European Central Bank president Christine Lagarde issued a sharp warning. She said political influence over the Fed would be a serious threat to global stability.
Lagarde stressed that such interference could weaken US stability and affect markets worldwide.
Asia fuels steady demand
Ash noted that gold rallies often cool when jewellery demand in China and India declines. Both nations are key buyers in the gold market. Normally, rising prices discourage jewellery purchases.
This time, demand remains strong. Consumers in China and India are shifting from jewellery to investment options such as bars and coins. Their continued interest supports gold’s rise, even at record levels.
