The gold price has climbed to a historic level as demand remains strong in uncertain economic times. The spot gold price touched $3,508.50 per ounce on Tuesday morning. It continued an upward trend that lifted the metal by nearly a third this year.
Global uncertainty drives demand
Gold attracts investors when the economy faces instability. Earlier this year, its value rose after President Donald Trump imposed sweeping tariffs. Those tariffs unsettled global trade and increased the search for safe assets. Analysts also expect the US central bank to cut interest rates. That expectation makes gold even more appealing for investors.
Adrian Ash, research director at BullionVault, explained that Trump’s actions shaped today’s gold rally. He said recent gains result from what Trump did to geopolitics and world trade. Ash added the US election last year ignited stronger momentum in gold buying.
Concerns over the Federal Reserve
Analysts also link the surge to doubts about the independence of the Federal Reserve. Trump repeatedly criticised the Fed’s chair Jerome Powell. He also attempted to remove one of its governors, Lisa Cook.
Derren Nathan from Hargreaves Lansdown said Trump’s efforts to weaken the Fed’s independence drove interest in safe haven assets such as gold. On Monday, European Central Bank head Christine Lagarde warned about risks to stability. She said any attempt by Trump to pressure the Fed would pose a very serious danger to the world economy.
Lagarde stressed that if the Fed responded to political influence, the consequences would be worrying. She warned that US stability would suffer and global markets would feel the impact.
Gold demand remains strong in Asia
Ash noted that gold rallies often slow when China and India cut back on jewellery purchases. Both countries are major buyers in the market. Usually, higher prices push consumers to step back from gold jewellery.
This time, however, demand continues. In China and India, many buyers turn from jewellery to investment gold products such as bars or coins. That shift ensures steady interest in the metal, even at record prices.
