Gold prices soared past $3,500 an ounce for the first time in history, marking a significant milestone as investors sought safe-haven assets amid heightened market uncertainty.
The surge came as Wall Street rebounded from a sharp decline driven by political tensions in the United States.
On Tuesday, spot gold reached a record $3,500.01 an ounce, continuing a rapid ascent that began at $2,623 at the start of the year. Market analysts now believe the price could climb to $4,000 within weeks, following the metal’s earlier milestone of surpassing $3,000.
This dramatic rise underscores growing investor concerns and the renewed demand for gold during times of global financial instability.
Traditionally considered a refuge during periods of economic and political turmoil, gold has attracted strong investor interest in recent months. Uncertainty surrounding the direction of US monetary policy, compounded by sharp rhetoric from former President Donald Trump, has made gold more appealing than traditional safe-haven assets like the US dollar or government bonds.
Trump’s recent criticism of Federal Reserve Chair Jerome Powell raised alarm among global markets. Accusations of mismanagement and suggestions of potential removal from office have led to concerns over central bank independence, sending ripples through the financial world.
Despite the political unease, stock markets rebounded on Tuesday. Major US indices, including the Dow Jones Industrial Average, the S&P 500, and the Nasdaq, each rose by around 2% in early afternoon trading. This recovery helped offset Monday’s steep losses.
European markets also posted gains, with London’s FTSE 100 up by 0.6%, marking its highest close in over two weeks. Germany’s DAX and France’s CAC each climbed by approximately 0.5%.
Meanwhile, Asian markets showed mixed results, with Japan’s Nikkei ending the day slightly lower.
Adding to the tension, the International Monetary Fund (IMF) issued a stark warning about the impact of US trade policies. The IMF described President Trump’s tariffs as a major shock to the global economy, prompting a downward revision of growth forecasts for the US, the UK, and the world as a whole.
The pound briefly reached a seven-month high of $1.3423 before stabilising, while the US dollar dipped to its lowest point since March 2022 before recovering slightly in afternoon trading.
The ongoing political conflict in Washington has led to a broader loss of confidence among investors. Fears over inflation, central bank independence, and fiscal uncertainty are intensifying market volatility.
Analysts warn that any further action against Jerome Powell or deviation from standard monetary policy procedures could deepen the crisis. The current environment has already weakened the US dollar and government debt, paving the way for gold’s exceptional rise.
As investors continue to reassess their positions in the face of growing economic and political challenges, gold’s momentum suggests it will remain a critical barometer of market sentiment in the weeks ahead.
