Gold has surged 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 beginning of the year.
Trade tensions push prices up
Gold often gains value when markets face instability. Earlier this year, prices 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 increasing gold’s appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies were central to the surge. He highlighted the impact of global trade disputes and shifting geopolitics. Ash added that last year’s US election gave further momentum to the rally.
Federal Reserve independence under threat
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 undermined 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 actions could destabilise the US and ripple through international markets.
Asia sustains 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 supports gold’s rise, even at record-breaking levels.
