Gold Soars to Unprecedented $3,500 Per Ounce as Market Fears Deepen

The price of gold surged to an all-time high on Tuesday, breaching the $3,500 per ounce mark, as a storm of economic uncertainty and political tension continues to drive investors toward safe-haven assets.

At $3,500.05 per ounce, spot gold set a new record before settling slightly lower at $3,473 by 3:35 a.m. ET. The yellow metal has now risen over 30% this year, making it the top-performing commodity of 2025 so far.

Why Is Gold Skyrocketing?

The rally is being fueled by a combination of political pressure on the U.S. Federal Reserve and growing concerns about the American economy. President Donald Trump’s escalating criticism of Fed Chair Jerome Powell is creating unease among investors, especially over the independence of U.S. monetary policy.

“Trump is ratcheting up pressure on Powell to loosen policy, and that’s spooking markets,” wrote ING commodities strategists in a Tuesday note.

The result? A wave of what traders are calling the “Sell America” trade—dumping U.S. assets like stocks, bonds, and the dollar, and rushing into gold.

Fed Under Fire, Confidence Shaken

Trump’s public push for easier monetary policy has prompted fears that the Fed’s decisions are being politically manipulated. This tension is being compounded by weakening economic data, such as a report from the Federal Reserve Bank of Philadelphia showing a sharp decline in manufacturing business confidence.

“The convergence of political tension and weakening data has pushed investors away from risk assets and into gold,” said Naeem Aslam, CIO of Zaye Capital Markets.

Gold ETF Holdings Climb, Forecasts Raised

Investor appetite for gold is also being reflected in exchange-traded fund (ETF) holdings, which are now at their highest levels since September 2023.

Major financial institutions are taking note. Earlier this month, Goldman Sachs raised its year-end gold price forecast by $400, now expecting the metal to hit $3,700 per ounce by the end of 2025.

What This Means for Investors

Gold’s record-breaking climb suggests that investors are bracing for more volatility ahead. With the U.S. economy showing signs of strain and political interference clouding central bank decisions, gold may remain the go-to hedge against turmoil.

As always, market watchers will be eyeing the Fed’s next moves—and the President’s next words—closely.

{Source: AOL}

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