Gold has climbed to its highest level ever as investors move their money into secure assets. On Tuesday morning, the spot price rose to $3,508.50 per ounce. The surge extends a rally that has lifted the metal by nearly one third this year.
Trade disputes drive momentum
Gold thrives during periods of instability. Earlier this year, its value spiked after President Donald Trump imposed sweeping tariffs. The measures disrupted global trade and pushed investors toward safer ground. Analysts also expect the US central bank to cut interest rates, which adds to gold’s attraction.
Adrian Ash, research director at BullionVault, said Trump’s actions on trade and geopolitics fuelled the rally. He added that last year’s US election gave the upward trend additional strength.
Federal Reserve under scrutiny
Analysts also link the rise to fears 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 behaviour undermined trust in the Fed. He explained this drove investors toward safe havens such as gold. On Monday, European Central Bank president Christine Lagarde warned of serious risks. She said political interference with the Fed would endanger the global economy.
Lagarde cautioned that such moves could damage US stability and shake markets worldwide.
Asia keeps market strong
Ash observed that gold rallies often slow when jewellery buyers in China and India retreat. Both countries are major markets for gold jewellery. Normally, rising prices reduce consumer demand.
This time, demand remains strong. Many buyers in China and India are shifting to investment products such as bars and coins. Their appetite keeps gold supported, even at record-breaking prices.
