Gold has surged to an all-time high as global uncertainty fuels demand for safe assets. On Tuesday morning, the spot price climbed to $3,508.50 per ounce. The rally has lifted gold by nearly a third since the start of the year.
Tariffs and global trade tensions push prices
Gold often gains strength when markets face turmoil. Earlier this year, its value rose after President Donald Trump introduced sweeping tariffs. The measures unsettled global trade and increased appetite for security. Analysts also expect the US central bank to lower interest rates, further boosting gold’s appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies had a decisive impact. He pointed to the effects of shifting geopolitics and strained trade. Ash also noted that the US election last year added more momentum to the surge.
Federal Reserve faces political challenges
Analysts warn that concerns about the Federal Reserve’s independence are also driving gold. Trump has repeatedly attacked Fed chair Jerome Powell. He even attempted to remove governor Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s interference undermined trust in the Fed. He argued this pushed investors toward safe haven assets like gold. On Monday, European Central Bank president Christine Lagarde sounded an alarm. She said political pressure on the Fed would pose a serious risk to global stability.
Lagarde warned that such moves could destabilise the US economy and echo worldwide.
Asia strengthens gold demand
Ash explained that gold rallies often slow when jewellery demand in China and India declines. Both nations are leading markets for gold jewellery. Normally, higher prices weaken purchases.
This time, demand continues. Buyers in China and India are turning from jewellery to investment products such as bars and coins. Their shift keeps demand strong, even as gold reaches unprecedented levels.
