Gold price vaults past $3,500 to new record
Bullion surpasses previous high set in April after Donald Trump’s ‘liberation day’ tariffs
Gold prices jumped to an all-time high on Tuesday, surpassing a previous record in April after President Donald Trump’s “liberation day” tariffs, amid a weak dollar and expectations of a US interest rate cut this month.
The spot price of gold rose 0.9 per cent to $3,508.70 a troy ounce during early trading in Asia, before paring gains to trade at $3,497.
Demand for bullion has risen as investors view it as a hedge against inflation and broad macroeconomic uncertainty, said analysts.
Mounting concerns about the Federal Reserve’s independence after Trump put pressure on chair Jay Powell and moved to sack governor Lisa Cook, as well as expectations of a rate cut, have fuelled the most recent rally.
“Everything’s coming together to provide the perfect situation for higher gold,” said David Wilson, director of commodities strategy at BNP Paribas. “Growing levels of economic uncertainty is quite clearly making gold more appealing.”
Inflows into gold exchange traded funds have emerged as an important source of demand that has supported prices, Goldman Sachs wrote in a recent note. Analysts from the bank forecast spot prices to hit $4,000 a troy ounce by the middle of next year.
Gold prices have nearly doubled since the start of 2023 as central banks have increased holdings.
Last year, the metal overtook the euro to become the world’s second-most common central bank reserve asset after the dollar, accounting for 20 per cent of global official reserves.
Large buyers last year included India, China, Turkey and Poland, according to the World Gold Council.
“You have that underlying de-dollarisation trend among some central banks,” said BNP’s Wilson. “That’s an underlying backstop that’s just continuing.”