Gold surged past the $3,500 mark for the first time in history on Tuesday, marking a new record high as investors sought safe-haven assets amid escalating global economic uncertainty. Spot gold reached a peak of $3,500.01 (£2,620), continuing a relentless rally that began at $2,623 an ounce at the start of 2025.
The surge comes in the wake of Donald Trump’s fierce criticism of Federal Reserve Chair Jerome Powell, which triggered a market sell-off on Monday. Trump’s comments, coupled with the ongoing tariff standoff with China, have shaken investor confidence, prompting many to flock to gold as a hedge against volatility.
Analysts Predict $4,000 Milestone
Market analysts are now speculating that gold’s bull run could extend even further. $4,000 an ounce is now seen as a realistic target in the coming weeks, reflecting broader concerns over global economic instability and fears of a deeper recession.
“We haven’t seen this kind of momentum in gold since the 2008 financial crisis. With geopolitical tensions and economic headwinds mounting, it’s clear investors are seeking protection,” said Chris Weston, head of research at Pepperstone.
Flight from the Dollar to Safe Havens
Traditionally, the US dollar and government bonds have been regarded as safe havens during market downturns. However, given the US’s role in recent global volatility—particularly through aggressive tariff policies and political conflict—investors are increasingly turning to gold.
The International Monetary Fund (IMF) echoed these concerns, issuing a stark warning that Trump’s tariffs have triggered a “major negative shock” to the global economy. The IMF has since cut its growth forecasts for the US, UK, and broader global markets.
Markets Attempt Recovery
Despite Monday’s sell-off, Wall Street rebounded on Tuesday, with major indices recovering much of their losses. European markets also saw modest gains, suggesting some resilience despite broader concerns.
As investors recalibrate their strategies, gold’s historic surge signifies a growing appetite for traditional hedges against market instability. Whether the metal can maintain its climb toward $4,000 remains to be seen, but its rise underscores the deepening uncertainty across global financial markets.
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