Gold Surges to Record High Amid Global Economic Uncertainty

The price of gold has climbed to an all-time high as investors continue to seek safety in the precious metal during a period of worldwide economic instability.

On Tuesday, the spot gold price reached $3,508.50 per ounce, extending an upward trend that has seen the metal gain nearly one-third in value since the beginning of the year. Gold has long been regarded as a safe haven asset, and its price initially spiked earlier this year after U.S. President Donald Trump unveiled sweeping tariffs that rattled global trade flows.

Analysts say the latest surge has also been fuelled by expectations that the U.S. Federal Reserve will move to cut its benchmark interest rate, a shift that would make gold even more appealing to investors.

Adrian Ash, director of research at BullionVault, told the BBC’s Today programme that Trump’s actions were a key driver of the metal’s recent performance. “It was really the US election last year that really put a fire under it,” he said, attributing the climb to “what he’s done to geopolitics [and] what he’s done to global trade.”

Concerns over the independence of the Federal Reserve have added another layer of uncertainty. Trump has repeatedly attacked Fed chair Jerome Powell and recently attempted to remove governor Lisa Cook, moves that have raised alarm in financial markets.

Derren Nathan of Hargreaves Lansdown argued that Trump’s “attempts to undermine the independence of the Federal Reserve Bank” were “driving renewed interest in safe haven assets including gold.”

Christine Lagarde, president of the European Central Bank, warned on Monday that such efforts could have global repercussions. She said that if the Fed were forced to yield to political pressure, it would pose a “very serious danger” to the global economy and have a “very worrying” impact on U.S. stability that would inevitably spread abroad.

Mr Ash noted that gold rallies typically ease when jewellery demand from China and India—the two largest gold jewellery markets—dips as prices rise. But in the current surge, demand from both countries has persisted, as consumers increasingly shift from jewellery purchases to investment-grade products such as coins and bullion bars.

Suki Cooper, a precious metals analyst at Standard Chartered, explained that the metal’s strength this year stems from multiple sources beyond U.S. politics. “Gold’s general price increase also comes from a ‘raft’ of other reasons,” she said, citing Russia’s invasion of Ukraine as a major factor that has intensified global political uncertainty. She added that shifting trade policies, which are disrupting inflation dynamics and supply chains, have also played a role in pushing prices higher.

“Gold has found added support from USD [U.S. dollar] weakness earlier in the year as the preferred safe haven,” Cooper concluded.

By fLEXI tEAM