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Gold soared to another all-time high in early Asian trading on Tuesday, as geopolitical anxiety and uncertainty over U.S. monetary policy drove investors toward safe-haven assets.
Gold Extends Historic Rally
- Spot Gold surged 1.7% to $3,482.76/oz
- Gold Futures (June) climbed 1.9% to $3,491.20/oz
This marks the third consecutive session of record-setting gains for the yellow metal, following a 3% jump on Monday. The rally is underpinned by a combination of factors:
- Growing fears over the independence of the Federal Reserve
- Deepening U.S.-China trade tensions
- A slumping U.S. dollar
- Persistent inflation and strong central bank gold buying
Fed Uncertainty Fuels Dollar Weakness
Investor jitters escalated after President Donald Trump signaled an intent to overhaul the Federal Reserve, with White House advisor Kevin Hassett confirming Trump is still studying the legal possibility of firing Fed Chair Jerome Powell.
“The Fed needs to cut rates immediately or the U.S. economy will slow,” Trump said on Monday.
In contrast, Powell reiterated last week that no rate cuts were imminent, citing the inflationary impact of tariffs and elevated policy uncertainty.
The U.S. dollar index remained near a three-year low, amplifying gold’s appeal to non-dollar investors.
Trade Tensions: China Issues Stern Warning
China stepped up its rhetoric, warning countries against forging pro-U.S. trade deals that could harm Beijing’s interests, in what appears to be a broad response to Washington’s recent 145% tariffs on Chinese imports.
The Ministry of Commerce accused the U.S. of using economic leverage to pressure allies into limiting trade with China, and vowed retaliatory measures if its concerns are ignored.
This renewed confrontation is keeping markets on edge, further elevating gold’s safe-haven appeal.
Other Precious Metals and Copper
- Silver Futures rose 0.8% to $32.795/oz
- Platinum Futures gained 1% to $976.10/oz
Meanwhile, Copper extended gains, hitting a two-week high on the back of a weaker dollar:
- LME Copper: +1% to $9,311.60/ton
- COMEX Copper (May): +1.1% to $4.7713/lb
However, investors remain wary due to the implications of tariffs on China, the world’s largest copper consumer.
Outlook
As long as political interference in the Fed, inflationary risk, and U.S.-China trade tensions dominate headlines, gold is likely to remain in demand. Analysts say a push toward $3,500/oz and beyond cannot be ruled out unless the Fed offers firm clarity or a de-escalation in trade rhetoric materializes.
Investors are closely watching for any new developments from both the White House and Beijing, as well as upcoming U.S. economic data that could influence the Fed’s tone.
