Gold has climbed to its highest level ever as investors turn to safe assets in turbulent times. On Tuesday morning, the spot price rose to $3,508.50 per ounce. The surge has lifted the metal by nearly a third since the start of the year.
Trade disputes add fuel to rally
Gold often strengthens when markets face instability. Earlier this year, prices rose sharply after President Donald Trump introduced sweeping tariffs. The measures unsettled global trade and boosted demand for security. 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 have been central to the surge. He pointed to the effects of global trade disputes and shifting geopolitics. Ash also noted that the US election last year added fresh momentum to the rally.
Concerns over Federal Reserve independence
Analysts also link the rise in gold to fears about the Federal Reserve’s independence. Trump has repeatedly attacked 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 trust in the institution. He explained this pushed investors to safe haven assets such as gold. On Monday, European Central Bank president Christine Lagarde raised concerns. She said political interference with the Fed would pose a serious threat to global stability.
Lagarde warned that such influence could destabilise the US economy and ripple across world markets.
Asia keeps demand strong
Ash noted that gold rallies often slow when jewellery demand in China and India falls. Both countries are leading buyers in the gold market. Normally, higher prices discourage purchases.
This time, demand has remained steady. Many buyers in China and India are shifting from jewellery to investment products like bars and coins. Their interest continues to support gold, even at record-breaking levels.
