Gold prices surged to a historic peak of $3,500 per ounce on Tuesday, extending a months-long rally fueled by investors seeking safe havens amid escalating trade tensions and mounting concerns over the stability of global markets.
The precious metal briefly touched the milestone in early trading before settling at $3,425.91 by midday, according to market data. This marks a dramatic rise from just $2,063.73 in January 2024, representing a gain of approximately 70% in less than 16 months.
“Gold is continuing to find buyers on any short-term dips, and it is really difficult to say how much further it can go. Momentum is clearly strong, which is discouraging investors or traders from selling gold significantly,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
Market observers attribute the unprecedented rally to a confluence of factors, including President Donald Trump’s renewed criticism of Federal Reserve Chair Jerome Powell, which has unsettled financial markets and raised concerns about the central bank’s independence.
The dollar’s weakness has further propelled gold’s ascent, making the metal more attractive for holders of other currencies. Analysts note that central banks worldwide have been steadily accumulating gold reserves, particularly in countries like Russia and China, which has contributed to tightening supply conditions.
“The ongoing uncertainty regarding tariffs has affected equity markets and brought another round of safe-haven buying into the gold market,” explained David Meger, director of metals trading at High Ridge Futures. “There are certain technical areas of resistance along the way that could cause a little profit-taking or pullback. But the ongoing bullish trend remains in place.”
Gold’s meteoric rise comes against a backdrop of global economic uncertainty, with Trump’s aggressive approach to trade policy triggering retaliatory measures from major trading partners. The President’s “Liberation Day” tariffs announced earlier this month have sent shockwaves through global markets, with the S&P 500 down more than 4% since the start of the year.
Some financial institutions have already adjusted their forecasts upward in response to gold’s relentless climb. Michael Widmer, head of metals research at Bank of America, recently projected the price would reach $3,500 within the next 18 months, though that target has been achieved far more rapidly than anticipated.
“It’s those tensions — the uncertainty about economic policies or the policy uncertainty — that have really been supportive for the gold market,” Widmer said in a recent interview.
For retail investors, the soaring price presents both opportunity and challenge. At current levels, a standard 400-troy-ounce gold bar is valued at approximately $1.3 million, putting direct ownership out of reach for most individual investors. However, fractional investment options through gold ETFs, mining stocks, and specialized retirement accounts have seen surging interest.
While the traditional role of gold as a hedge against inflation remains intact, its current rally appears more closely tied to its status as a safe haven during periods of market turmoil. As one analyst described it, gold has become “the panic asset of choice” in the current economic climate.
The record-breaking run marks a significant milestone in gold’s centuries-old history as a store of value. Having breached $3,000 just five weeks ago, the rapid acceleration to $3,500 signals extraordinary momentum in a market typically characterized by gradual price movements.
Silver, often considered gold’s more affordable cousin, has not kept pace with the rally. The metal traded around $32.97 an ounce on Tuesday, representing a more modest gain this year.
Looking ahead, market watchers remain divided on whether gold’s ascent will continue or whether the rapid rise signals an overheated market due for correction. With additional tariff announcements expected tomorrow in what President Trump has labeled “Liberation Day,” traders are bracing for potential volatility across all asset classes.