TLDR
- Gold prices surged above $3,400 per ounce, reaching a record high of $3,436.01
- The price jump represents over $700 gain since the start of 2025 (27% increase)
- US-China trade tensions and Trump’s comments about Fed Chairman Powell weakened the dollar
- Gold has surpassed its inflation-adjusted 1980 record of $850 per ounce
- Holdings in gold-backed ETFs have increased for 12 consecutive weeks
Gold prices shattered records on Monday, surging past $3,400 per ounce as investors fled to the precious metal amid growing economic and geopolitical uncertainties. Spot gold rose 2.7% to $3,417.62 an ounce, after hitting an all-time high of $3,436.01 earlier in the session.
The price jump came as the U.S. dollar weakened to its lowest level in three years. This decline makes gold more attractive to holders of other currencies.
U.S. gold futures settled 2.9% higher at $3,425.30, with June delivery contracts reaching as high as $3,455.90 in evening trading.
The yellow metal has now gained more than $700 since the start of 2025, representing a 27% increase. This impressive run has pushed gold beyond its inflation-adjusted 1980 record of $850 per ounce.
Trade War Concerns Fuel Gold’s Rise
Escalating tensions between the United States and China have played a key role in driving investors toward gold. China recently accused Washington of abusing tariffs and warned other countries against striking economic deals with the U.S.
“As tariff tensions continue to move at a fevered pitch, we continue to see gold prices move to the upside as a safe haven response,” said David Meger, director of metals trading at High Ridge Futures.
The breakdown in international cooperation over recent years has contributed to gold’s sustained high prices, according to analysts.
The end of the Russia-Ukraine ceasefire has further intensified geopolitical risks, pushing more investors toward the safe-haven metal.
Federal Reserve Independence Questioned
President Donald Trump’s comments about Federal Reserve Chairman Jerome Powell have raised concerns about the central bank’s independence, further weakening the dollar and boosting gold.
“Firing Powell not only undermines the principle of central bank independence, but risks politicizing U.S. monetary policy in a way that markets will find unsettling,”
said Christopher Wong, strategist at Oversea-Chinese Banking Corp.
Wong added that questioning the Fed’s credibility could erode confidence in the dollar and accelerate flows into safe havens, including gold.
These concerns have driven many investors to seek the relative safety of gold, which is considered a hedge against economic uncertainties and a highly liquid asset.
Strong Institutional Support
The gold rally has received strong institutional backing. Holdings in gold-backed exchange-traded funds have increased for 12 consecutive weeks, the longest streak since 2022.
Central banks have also been adding the metal to their reserves, providing further support for global demand.
Banks have become increasingly optimistic about gold’s prospects as the rally continues. Goldman Sachs Group has forecast that the metal could reach $4,000 by mid-2026.
Despite the strong upward trend, some analysts caution that the market may be approaching a peak.
“These much bigger daily price moves in gold are one early clue this very mature bull market run is close to climaxing,” said Jim Wyckoff, senior analyst at Kitco Metals.
Other precious metals have shown mixed performance. Spot silver remained steady at $32.60 an ounce on Monday, while platinum dropped 0.6% to $961.61. Palladium experienced a larger decline, falling 3% to $934.25.
HSBC analyst James Steel noted that while previous gold price spikes were often tied to issues that were resolved quickly, the current situation appears different.
“The breakdown in international cooperation in the last few years has led to gold staying permanently high,” Steel said. “It leads one to think there is a bigger geopolitical bid in the market.”
Gold surpassed the $3,300 mark last Wednesday, and its strong momentum pushed it up another $100 in just a few days.
Investors can expect pullbacks and profit-taking at times, but many analysts believe the underlying trend remains upward.
As trade and geopolitical tensions persist, gold continues to attract investors seeking a safe haven for their assets in these uncertain times.
