Gold has surged to an all-time high as uncertainty in global markets drives demand for safe 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 beginning of the year.
Trade disputes fuel gold rally
Gold usually gains strength when markets face instability. Earlier this year, its price spiked after President Donald Trump imposed sweeping tariffs. The measures disrupted global trade and encouraged investors to seek safe assets. Analysts also expect the US central bank to cut interest rates, increasing gold’s appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies were central to the surge. He highlighted the impact of shifting geopolitics and global trade tensions. Ash added that last year’s US election gave the rally additional momentum.
Federal Reserve independence under pressure
The rise in gold also reflects concerns about 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 on the Fed weakened investor confidence. He explained this pushed 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 influence could destabilise the US economy and ripple across world markets.
Strong demand continues in Asia
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, high prices reduce demand.
This time, demand has remained steady. 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.
