Gold has climbed to its highest level ever as investors look for safety in uncertain times. On Tuesday morning, the spot price reached $3,508.50 per ounce. The rally has pushed the metal up by nearly a third this year.
Tariffs and politics fuel demand
Gold often strengthens when confidence in the global economy falters. Earlier this year, prices jumped after President Donald Trump imposed wide-ranging tariffs. The measures unsettled global trade and increased appetite for secure assets. Analysts also expect the US central bank to cut interest rates, making gold even more attractive.
Adrian Ash, research director at BullionVault, said the surge reflects Trump’s influence on trade and geopolitics. He added that last year’s US election gave further momentum to the trend.
Federal Reserve under pressure
The surge also highlights fears about the Federal Reserve’s independence. Trump has repeatedly attacked Fed chair Jerome Powell. He even tried to remove one of its governors, Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s attempts to weaken the Fed boosted demand for safe havens like gold. On Monday, European Central Bank president Christine Lagarde issued a warning. She said any political interference with the Fed would be a grave threat to the global economy.
Lagarde stressed that such pressure could harm US stability and ripple across international markets.
Asian buyers sustain strong market
Ash noted that gold rallies usually cool when jewellery buyers in China and India step back. Both countries are among the largest markets for gold jewellery. Normally, higher prices reduce purchases.
This time, demand has remained strong. Many buyers in China and India have shifted from jewellery to investment products such as bars and coins. Their steady appetite supports record demand, even at historic price levels.
