Gold prices surged to an all-time high on Tuesday, breaking the $3,500 mark for the first time. Investors reacted to recent US trade moves, a weakening dollar, and expectations of a US interest rate cut later this month.
The spot price of gold rose 0.9 percent to $3,508.70 per troy ounce in early Asian trading. It later trimmed gains slightly to $3,497. Analysts said rising demand reflects investors seeking protection against inflation and economic uncertainty.
Concerns about the Federal Reserve’s independence have also fueled the rally. President Donald Trump recently criticized Fed Chair Jay Powell and attempted to remove Governor Lisa Cook. These actions, along with growing speculation about a rate cut, have encouraged investors to turn to gold.
“Everything’s coming together for higher gold prices,” said David Wilson, director of commodities strategy at BNP Paribas. “Rising economic uncertainty is making gold more appealing to investors.”
Exchange traded funds (ETFs) have also become a key driver of demand. Goldman Sachs noted that inflows into gold ETFs have supported the price surge. The bank predicts gold could reach $4,000 per troy ounce by mid-next year.
Gold has nearly doubled in value since the start of 2023. Central banks around the world have increased their gold holdings, further pushing prices upward. Last year, gold surpassed the euro to become the second-largest central bank reserve asset, after the US dollar, representing 20 percent of official global reserves.
Major buyers last year included India, China, Turkey, and Poland, according to the World Gold Council. This trend reflects ongoing efforts by some nations to diversify reserves away from the US dollar.
“You have an underlying de-dollarization trend among some central banks,” said Wilson. “This trend provides a long-term support for gold prices.”
Analysts believe that the combination of global economic uncertainty, central bank policies, and rising inflation concerns will continue to drive gold demand. Many investors now see the precious metal as a safe haven in a volatile financial environment.
The recent price spike comes after earlier gains in April, when gold briefly reached record levels following US tariff announcements. With continued pressure on the dollar and expectations of monetary easing, the metal is poised for further growth.
Gold’s role as a hedge against inflation and geopolitical uncertainty remains a central factor in its appeal. Analysts suggest that even with short-term price fluctuations, long-term trends favor higher gold prices.
As investors increasingly turn to gold ETFs and physical bullion, demand could maintain strong momentum. Central bank purchases and shifting reserve strategies are also expected to keep the metal in focus for global markets.
Overall, the $3,500 milestone underscores gold’s continued importance as a safe investment. Market watchers will monitor Federal Reserve decisions, trade tensions, and economic data for clues on future price movements.