The price of gold has surged to an all-time high, reflecting renewed investor demand for safe-haven assets amid global economic and political uncertainty.
Spot gold climbed to $3,508.50 per ounce in early trading on Tuesday, extending a rally that has already lifted the precious metal by nearly a third since the start of the year. Analysts say the surge has been driven by a combination of trade tensions, political risks in the United States, and expectations of lower interest rates from the US Federal Reserve.
Gold is traditionally seen as a reliable store of value during times of instability. Its latest rally began earlier this year when President Donald Trump announced sweeping tariffs that rattled global trade and heightened fears of a prolonged slowdown in international commerce.
Adrian Ash, director of research at BullionVault, told the BBC’s Today programme that much of gold’s momentum could be traced back to political developments in Washington. “It was really the US election last year that put a fire under it,” he said, adding that Trump’s actions on global trade and geopolitics had further accelerated demand for gold.
Expectations of a US interest rate cut have also supported the rise. A lower cost of borrowing reduces the opportunity cost of holding non-yielding assets such as gold, making the metal more attractive for investors seeking security.
Concerns about the independence of the Federal Reserve have provided another layer of support. Trump has repeatedly criticised Fed Chair Jerome Powell and recently attempted to remove one of the central bank’s governors, Lisa Cook. Analysts warn such moves risk undermining confidence in the institution.
Derren Nathan of Hargreaves Lansdown said Trump’s “attempts to undermine the independence of the Federal Reserve Bank” were “driving renewed interest in safe-haven assets including gold.”
The issue has also drawn international attention. On Monday, European Central Bank President Christine Lagarde cautioned that political interference in the Federal Reserve would be a “very serious danger” to the global economy. She warned that if the Fed were pressured into responding to political priorities, the outcome could have “very worrying” consequences for both US and global financial stability.
Ordinarily, surges in gold prices are tempered by a slowdown in demand from key jewellery markets such as China and India. However, analysts say that trend has not materialised this time. Instead, buyers in both countries are shifting towards investment-grade products such as gold bars and coins, keeping demand robust despite record-high prices.
With political tensions showing little sign of easing and central banks weighing monetary policy shifts, analysts suggest the rally in gold may not be over yet.
