Gold has reached its highest value ever as investors rush to secure their money in uncertain times. On Tuesday morning, the spot price hit $3,508.50 per ounce. The rally has lifted the precious metal by nearly a third this year.
Trade disputes fuel investor demand
Gold often gains when global stability weakens. Earlier this year, its price jumped after President Donald Trump imposed wide tariffs. Those measures unsettled international trade and pushed investors to safer ground. Analysts also expect the US central bank to cut interest rates, which further boosts gold’s appeal.
Adrian Ash, research director at BullionVault, linked the surge directly to Trump’s policies. He said the rally stems from changes in global trade and geopolitics. Ash added that the US election last year gave the market new momentum.
Concerns grow over Federal Reserve
Analysts say doubts about the independence of the Federal Reserve also fuel gold’s rise. Trump has repeatedly criticised Fed chair Jerome Powell. He even attempted to oust one of the bank’s governors, Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s pressure on the Fed undermined confidence. He explained this created stronger interest in safe haven assets such as gold. European Central Bank president Christine Lagarde warned on Monday about global risks. She said interference with the Fed would be a serious threat to economic stability.
Lagarde cautioned that political influence over the Fed would harm the US and echo worldwide.
Asian buyers sustain strong market
Ash noted that gold rallies often weaken when China and India reduce jewellery purchases. Both countries rank among the largest buyers of gold. Typically, high prices discourage jewellery demand.
This time, demand remains strong. Consumers in China and India are shifting from jewellery to investment products like bars and coins. That trend ensures continued interest in gold, even at record-breaking levels.
