Gold prices surged to an all-time high of over $3,500 per ounce on Tuesday, marking a historic milestone for the precious metal. As of 09:30 Belgian time, gold was trading at $3,467.87 per ounce, following an earlier peak of $3,500.10. The rally has been fueled by escalating tensions between US President Donald Trump and Federal Reserve Chairman Jerome Powell, along with growing concerns about the ongoing trade war between the US and China.
Key Drivers Behind Gold’s Historic Surge
Gold has seen a remarkable increase of more than 30% since the start of the year, largely due to a combination of factors shaking investor confidence in the US economy. The primary catalyst has been Trump’s repeated calls for the Federal Reserve to lower interest rates, despite a declining inflation rate. His increasing public criticism of Powell has led to fears about the politicization of US monetary policy. Although Trump has threatened to remove Powell from his position, he lacks the legal authority to do so without evidence of misconduct.
At the same time, the ongoing US-China trade war continues to unfold, with both nations imposing heavy tariffs on each other’s goods. This has added to global economic uncertainty, prompting investors to seek refuge in safe-haven assets like gold.
Weakened US Dollar and Declining Confidence
In addition to the political turmoil, the US dollar has experienced significant weakness, hitting its lowest point against the euro in three years. As the dollar declines, gold becomes an increasingly attractive option for investors looking to protect their wealth from currency volatility and inflation.
Lee Liang Le, a market analyst at Kallanish Index Services in Singapore, noted that the sharp rise in gold prices is indicative of growing concerns about the US economy. “The rapid increase in gold prices this year reflects the markets’ declining confidence in the United States,” he said.
A Safe-Haven Asset in Times of Crisis
Gold’s reputation as the ultimate safe-haven asset has been solidified in the face of geopolitical and economic instability. With global tensions on the rise, gold remains a key hedge against market volatility and a store of value during uncertain times.
As the trade war between the US and China continues to develop and political tensions over US monetary policy persist, gold’s appeal is likely to remain strong. Investors are expected to continue flocking to the yellow metal as a way to safeguard their portfolios amid rising uncertainties.
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