Gold prices soared to a historic high of $3,500 per ounce on Tuesday before retreating slightly, as mounting concerns over potential political interference in the Federal Reserve drove investors away from U.S. stocks, bonds, and the dollar.
The rally highlights increasing demand for safe-haven assets amid uncertainty in financial markets.
Bullion climbed as much as 2.2% in early trading, briefly touching $3,500 per ounce, before easing as traders locked in profits.
The surge came alongside rallies in traditional safe-haven assets, including the Japanese yen and Swiss franc, which gained ground following renewed calls from President Donald Trump for immediate Fed rate cuts—a move seen as a challenge to the central bank’s independence.
The pressure contributed to the U.S. dollar’s decline to its lowest level since 2023.
Analysts have pointed to eroding confidence in U.S. assets as a key driver behind gold’s extended rally.
“Gold’s rapid ascent this year tells me that markets have less confidence in the U.S. than ever,” said Lee Liang Le, an analyst at Kallanish Index Services. “The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative.”
Gold has gained more than 30% in 2025, as geopolitical tensions and trade disputes have roiled markets, causing investors to rethink their reliance on dollar-denominated assets. Flows into bullion-backed exchange-traded funds (ETFs) and significant central bank purchases have further fueled the surge, with gold prices rising every month this year.
The rally reflects a broader strategy by investors to diversify away from dollar assets into more stable hedges.
“There is a desire to diversify out of dollar assets into a broader range of safe havens,” said Kamakshya Trivedi, head of global FX, rates, and emerging-market strategy at Goldman Sachs Group Inc., in an interview with Bloomberg TV.
Major investment banks are increasingly bullish on gold, given its sustained upward trajectory.
However, some technical indicators suggest that gold’s rapid ascent may be due for a temporary pause. The bullion’s 14-day relative-strength index—which measures momentum and price intensity—has surpassed 78, indicating that the asset may be overbought, as readings above 70 often signal potential corrections.
As of 10:37 a.m. in Nigeria, gold for immediate delivery was trading 0.9% higher at $3,454.88 per ounce, slightly retreating from its record peak.