Gold Surges Past $3,500 as Investor Anxiety Grows Over Fed Tensions
Gold has soared above $3,500 an ounce for the first time, as investors flee to safe-haven assets amid deepening market turmoil and a sharp slide in the US dollar, which has hit a three-year low.
The surge follows a blistering attack by former President Donald Trump on Federal Reserve Chair Jerome Powell, which has unnerved global markets. Spot gold reached its record high on Tuesday morning, continuing a powerful rally that has lifted it from $2,623 an ounce at the start of the year. Analysts now say the metal could reach $4,000 in the coming weeks, barely a month after breaching the $3,000 mark for the first time.
Traditionally, US government bonds and the dollar serve as safe havens during times of uncertainty. But with Washington at the centre of the recent financial turbulence, investors are increasingly turning to gold as their preferred shelter.
The flight from US assets has weighed heavily on Wall Street, with the Dow Jones Industrial Average plunging nearly 1,000 points—down 2.5%—on Monday. The index is now on track for its worst April since 1932.
Traders remained on edge Tuesday after US President Donald Trump escalated his attacks on Federal Reserve Chair Jerome Powell, calling him “Mr Too Late” and “a major loser” over his reluctance to cut interest rates.
The criticism weighed on the US dollar, which fell to its lowest level since March 2022 against a basket of major currencies in early trading, before recovering slightly later in the session.
Russ Mould, investment director at AJ Bell, warned that Trump’s ongoing remarks are raising serious concerns about the Fed’s independence. “Persistent comments from President Donald Trump, which put the independence of the US Federal Reserve in question, resulted in weakness in the dollar, US Treasuries and Wall Street overnight,” he said.
Mould added: “If the administration is able—or willing—to act on its threat to remove Jerome Powell before his term ends next year, it could spark an even sharper market reaction, especially amid concerns about inflation.”
Meanwhile, the pound hit a seven-month high of $1.3423 and is on course for its longest winning streak against the dollar in over half a century. Sterling has gained 3.5% over the past 10 trading days, buoyed by market movements since “liberation day” on 2 April, when Trump announced sweeping global tariffs.
