Gold prices surged to fresh record highs Tuesday, driven by mounting investor anxiety over U.S. political and economic instability following President Donald Trump's intensifying public assault on Federal Reserve Chair Jerome Powell. The precious metal climbed as high as $3,509.90 per ounce, extending a year-to-date rally that now exceeds 31%.
Gold futures last traded at $3,463.20, up 1.1% on the day, after closing at $3,425.30 on Monday. Spot prices also hit record levels, peaking at $3,500.05 before paring gains slightly. The surge in gold prices comes amid growing global demand for safe-haven assets, with central banks and private investors boosting their holdings in response to policy uncertainty and rising inflation fears.
"Gold has continued to serve as an effective hedge amid ongoing trade uncertainty," said Mark Haefele, global wealth management chief investment officer at UBS. "Despite this strong performance, we see further upside potential."
Trump's sharp rhetoric against Powell escalated on Monday, when he publicly labeled the Fed chair a "major loser" and demanded immediate interest rate cuts. His comments triggered a sharp sell-off in U.S. equities, with the Dow Jones Industrial Average plunging more than 970 points and all three major indexes closing lower.
The pressure campaign follows weeks of market volatility tied to Trump's April 2 tariff announcement, which has spurred concerns over rising inflation and potential recession. Last week, Powell said at a Chicago event that the tariffs were "unlike anything in modern history," warning they could fuel inflation and weigh on growth. Since then, Trump has vowed to fire him and continued his attacks on social media.
Rania Gule, senior market analyst at XS.com, said in a Tuesday note, "This rally reflects ongoing recession fears in the U.S. economy and heightened political tensions."
Bond markets have reflected a divergent sentiment. As investors flee equities, selling pressure has hit U.S. Treasurys, pushing yields higher. The 10-year yield, a benchmark for consumer and business borrowing, continued to rise Tuesday, further illustrating investors' shifting risk appetite.
