Gold has risen to a record level as global instability drives demand for safe assets. On Tuesday morning, the spot price touched $3,508.50 per ounce. The rally has boosted the metal by nearly a third this year.
Trade tensions drive surge
Gold traditionally strengthens during periods of uncertainty. Earlier this year, its price spiked after President Donald Trump imposed 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 appeal.
Adrian Ash, research director at BullionVault, said Trump’s policies sparked the surge. He pointed to shifts in geopolitics and global trade. Ash also noted that last year’s US election gave the rally new momentum.
Pressure on the Federal Reserve
Analysts say worries about the Federal Reserve’s independence are also fuelling gold’s rise. Trump has repeatedly criticised Fed chair Jerome Powell. He even tried to remove governor Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s attempts to undermine the Fed pushed investors toward safe havens like gold. On Monday, European Central Bank president Christine Lagarde issued a warning. She said political influence over the Fed would pose a grave threat to the global economy.
Lagarde stressed that such interference could destabilise the US and shake markets worldwide.
Strong demand in Asia
Ash observed that gold rallies usually slow when jewellery demand in China and India declines. Both countries are among the biggest markets for gold jewellery. Normally, higher prices discourage purchases.
This time, demand has remained firm. Buyers in China and India are shifting from jewellery to investment products such as bars and coins. Their continued interest supports record demand, even at unprecedented prices.
