Gold has surged to a historic record as global tensions drive investors toward secure 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.
Trade disputes push prices higher
Gold thrives in times of economic stress. Earlier this year, its value jumped after President Donald Trump introduced sweeping tariffs. The measures unsettled global trade and encouraged investors to seek stability. Analysts also expect the US central bank to cut interest rates, adding to gold’s attraction.
Adrian Ash, research director at BullionVault, said Trump’s policies played a major role in the surge. He pointed to trade tensions and geopolitics as key drivers. Ash also noted that the US election last year gave the rally fresh energy.
Worries grow over Federal Reserve
Concerns about the independence of the Federal Reserve have added fuel to the climb. Trump has repeatedly criticised Fed chair Jerome Powell. He even attempted to dismiss governor Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s actions undermined trust in the Fed. He argued this pushed investors to safe havens such as gold. On Monday, European Central Bank president Christine Lagarde issued a warning. She said political interference in the Fed would pose a grave risk to global stability.
Lagarde stressed that such influence could destabilise the US and shake markets worldwide.
Demand in Asia remains strong
Ash explained that gold rallies usually slow when buyers in China and India reduce jewellery purchases. Both countries rank among the largest gold markets. Typically, rising prices discourage jewellery buying.
This time, demand has remained strong. Consumers in China and India are turning to investment products such as bars and coins. Their continued interest ensures strong support for gold, even at record-breaking prices.
