Gold prices surged to a record-breaking high of over $3,500 per ounce on Tuesday, fueled by escalating anxieties surrounding President Donald Trump’s ongoing attacks on the Federal Reserve. This dramatic increase follows a near four-week low the previous day, highlighting the volatile nature of the market in response to political uncertainty.
The precious metal’s remarkable ascent is largely attributed to investor concerns sparked by Trump’s renewed criticism of Federal Reserve Chairman Jerome Powell. Trump’s public pressure campaign, including his demand for immediate interest rate cuts and scathing personal attacks, sent shockwaves through equity markets, triggering a significant sell-off in the Dow Jones Industrial Average, which plummeted over 970 points. This heightened economic uncertainty drove investors towards the perceived safety of gold.
Gold’s status as a safe-haven asset during times of economic turmoil has solidified its position as a sought-after investment. The trend is further supported by the actions of central banks globally, which have been actively bolstering their gold reserves throughout the year. This collective increase in demand has significantly contributed to gold’s impressive 31% year-to-date rally and over 9% surge since the announcement of sweeping tariffs earlier this month.
Analysts at UBS, led by global wealth management chief investment officer Mark Haefele, remain optimistic about gold’s future prospects. In a note to clients, they highlighted gold’s effectiveness as a hedge against ongoing trade uncertainty, predicting further potential for price increases. They cite continued investment demand, central bank diversification, and a volatile macroeconomic landscape as key supporting factors.
The situation underscores the significant impact of political actions on global financial markets. As Trump’s attacks on the Fed continue, and the global trade war remains unresolved, gold’s role as a safe haven is likely to remain a significant driver of its price in the near future.
