Gold surged past $3,490 per ounce on Tuesday, setting a fresh all-time high as mounting economic and political uncertainties fueled a rush into safe-haven assets. The latest rally was propelled by growing risk aversion among investors, with market sentiment increasingly rattled by fears over the stability of US monetary policy and escalating global trade tensions.
Gold hits fresh record
On Monday, President Trump once again lashed out at Federal Reserve Chair Jerome Powell, suggesting the possibility of removing him over delays in delivering deeper interest rate cuts. The unprecedented nature of such comments stoked fears about the politicization of the Fed, raising doubts about the institution’s independence and its ability to navigate a fragile economic environment objectively. Concerns over the Fed’s credibility contributed to a sharp pullback in the US dollar and heightened demand for assets perceived as more reliable stores of value, including gold.
Adding to the nervousness were fresh signs of strain in US-China relations. Trump’s announcement last week of a new investigation into tariffs on critical minerals imports raised alarms that another front in the trade war could be opening. The proposed measures, which could impact strategic commodities like rare earths—materials in which China dominates global supply chains—are seen as a potential flashpoint that could worsen diplomatic and economic tensions between the world’s two largest economies. Such developments have reinforced investor expectations of a more turbulent global landscape ahead.
Gold gained 30% year-to-date
Gold’s stellar performance so far this year—up more than 30%—reflects a confluence of supportive factors, including persistently low real interest rates, a weaker dollar, geopolitical instability, and widespread skepticism toward fiat currencies. Central bank demand has also remained robust, as emerging and developed economies alike seek to diversify their reserves away from traditional assets.
With financial markets grappling with an unusually complex set of risks, analysts suggest that gold could remain in high demand for the foreseeable future. Technical traders are now eyeing psychological milestones beyond $3,500, while macro investors point to continued fiscal slippage, global fragmentation, and monetary policy uncertainty as reasons to maintain bullish positions in the precious metal.
