On Tuesday, the record gold price climbed above $3,508.50 per ounce, fueled by global uncertainty, inflationary concerns, and shifting central bank strategies. Gold has surged nearly one-third this year, with analysts pointing directly to Donald Trump’s tariffs and geopolitical moves, which are unsettling global trade.
Investors view gold as a hedge against turbulence, and expectations of US Federal Reserve interest rate cuts have intensified that appeal. Adrian Ash of BullionVault said Trump’s policies reshaped geopolitics and ignited investor demand, stressing that last year’s US election accelerated the rally.
Further pressure comes from Trump’s public attacks on Federal Reserve leaders, raising fears about the bank’s independence and undermining investor confidence. Christine Lagarde of the European Central Bank warned that interference with the Fed risks a very serious danger to global stability, heightening market anxieties significantly.
Meanwhile, central banks worldwide increased gold holdings while reducing US Treasury bonds, signaling strategic diversification amid debt concerns and weakening dollar confidence. India, China, Turkey, and Poland have accumulated reserves, cementing gold’s status as the second-largest global reserve asset behind the US dollar.
Demand remains strong in China and India, where buyers have shifted from jewelry toward investment products like bars and coins despite higher prices. Russia’s war in Ukraine and broader political instability continue fueling the appetite for gold, alongside disrupted supply chains and surging inflation fears.
European bond yields reached multi-decade highs, further unsettling markets, while the pound fell sharply after renewed tariff concerns rattled investor sentiment. Wall Street mirrored European declines, with the FTSE 100 dropping as investors braced for rising borrowing costs and tightening global credit conditions.
UBS’s Mark Haefele predicted gold could climb to $3,700 by June, while worst-case scenarios might propel prices toward $4,000 per ounce. Silver also surged, reaching levels unseen since 2011, though analysts suggest its upside may outpace gold given current valuation ratios.
