Gold prices have soared to an all-time high as global economic uncertainty deepens. Early Tuesday, spot gold — the price for immediate delivery — surged to $3,508.50 per ounce, according to a BBC report. So far this year, the value of gold has climbed by nearly one-third.
During times of financial turmoil, investors often turn to gold as a safer asset. The sharp rise this year has largely been fueled by US President Donald Trump’s sweeping tariffs and the resulting turbulence in global trade.
Analysts note that expectations of an imminent interest rate cut by the US Federal Reserve have also driven demand. Lower interest rates typically reduce the incentive for saving in banks, prompting investors to favor gold as a more secure and profitable option.
Adrian Ash, research director at BullionVault, said Trump’s policies and their impact on global trade are the primary drivers of the surge. “In fact, last year’s US election really lit the fire under gold prices,” he remarked.
Concerns over the independence of the Federal Reserve have further rattled markets. Trump has repeatedly criticized Fed Chair Jerome Powell and recently attempted to remove Governor Lisa Cook.
Commenting on this, Derren Nathan of Hargreaves Lansdown said, “Efforts to undermine the Fed’s independence are pushing investors back towards safe-haven assets.”
European Central Bank chief Christine Lagarde also warned on Monday that any weakening of Fed independence could pose a “very serious threat” to the global economy. She cautioned that if the Fed were to bow to political pressure, it would have “alarming consequences” for both the US and worldwide economic stability.
Typically, sharp spikes in gold prices lead major markets like China and India to reduce purchases. But this time, a different trend is emerging — instead of cutting back, buyers in these countries are shifting from jewelry to investment-grade gold products such as bars and coins.
