Gold Reaches Record High as Investors Seek Safety Amid Fed and Policy Concerns

Gold prices surged to an all-time high above $3,500 an ounce on Tuesday before easing slightly, as heightened investor unease over US monetary policy and political tensions drove a renewed rush into safe-haven assets.

The precious metal gained as much as 2.2% during early trading, briefly touching $3,500 for the first time, before settling lower as traders locked in profits. Despite the pullback, bullion remained up nearly 1% on the day, continuing a strong upward trend that has seen prices rise by more than 30% in 2025.

The rally came amid escalating concerns about the independence of the Federal Reserve. President Donald Trump intensified pressure on Fed Chair Jerome Powell, publicly urging immediate interest rate cuts and reportedly considering removing Powell from his post. These comments stirred fears of political interference in monetary policy, weakening confidence in US financial institutions and sparking market volatility.

“Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever,” said Lee Liang Le, an analyst at Kallanish Index Services. “The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative.”

The growing uncertainty has prompted investors to rotate away from traditional US assets—such as stocks, bonds, and the dollar—and toward havens like gold, the Japanese yen, and the Swiss franc. Gold has been particularly resilient, buoyed by strong demand from exchange-traded funds (ETFs) and central bank purchases across several regions.

According to the World Gold Council, ETF holdings have risen each month this year, with North America and Europe leading the inflows. Kamakshya Trivedi of Goldman Sachs noted that the gold rally reflects “a desire to diversify out of dollar assets into a broader range of safe havens.”

Gold’s appeal as a refuge was further emphasized by analysts at Jefferies, who called it “the only true safe-haven left” amid concerns over US fiscal and monetary stability.

Despite its strength, some technical indicators suggest the metal may be entering overbought territory. Bullion’s 14-day relative strength index climbed above 78, exceeding the 70 mark often seen as a signal for a potential short-term pullback.

Still, many market watchers remain optimistic about gold’s medium-term trajectory.

“Bullion performs best when the global economy is in distress,” said Ven Ram, macro strategist at Bloomberg.

Ram noted that current levels of uncertainty could continue to support high gold prices.

The recent gains have also lifted mining stocks globally. Shares in Zijin Mining Group Co., a major Chinese producer, jumped more than 6% in Hong Kong trading and have climbed over 25% year-to-date.

Elsewhere in the markets, futures for the S&P 500 pointed to a rebound after Monday’s losses, while European and Asian stocks showed mixed performance. The US dollar remained volatile, declining further against the yen but showing modest recovery against the euro. The yield on the 10-year Treasury note inched higher to 4.41%.

The New York Times and Bloomberg contributed to this report.