Gold has climbed to a historic high as global uncertainty drives demand for secure assets. 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 boost gold
Gold often strengthens when markets face instability. Earlier this year, prices jumped after President Donald Trump introduced sweeping tariffs. The measures disrupted global trade and pushed investors toward 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 played a major role in the surge. He pointed to the impact of geopolitics and global trade disputes. Ash also noted that last year’s US election added momentum to the rally.
Federal Reserve faces scrutiny
The rise in gold also reflects concerns over the Federal Reserve’s independence. 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 drove investors to 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 affect markets worldwide.
Asia maintains strong demand
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, 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 sustains gold’s rise, even at record-breaking levels.
