Gold prices surged past the US$3,450 mark during Tuesday's Asian trade, maintaining record-setting momentum after a 3% gain on Monday. The rally has been fuelled by growing investor concerns over the United States' financial stability following criticism of Federal Reserve Chair Jerome Powell by President Donald Trump.
By 2:45 pm AEST (5:45 am GMT) spot gold prices lifted $57.35 or 1.7% to fresh record highs of US$3,482.58 per ounce.
Trump escalated his criticism on Monday, calling Powell “Mr. Too Late” and “a major loser”, claiming the U.S. economy is headed for a slowdown unless he lowers interest rates.
The remarks intensified fears over the Fed's independence and triggered further weakness in the U.S. dollar, aiding the ascent of the dollar-denominated gold price.
“Gold prices hit a record high of USD 3,420/oz amid a renewed USD selloff, which fell to a three-year low of 98 following reports of Trump attempting to end Powell’s term early. This action could undermine the Federal Reserve's credibility, destabilise the U.S. economy and erode confidence in the USD,” noted analysts at ANZ.
Even with a modest rebound in the U.S. dollar, the broader market sentiment remains risk-averse, keeping gold in favour as a protective asset. Investors remain wary amid the backdrop of U.S.-China trade tensions and ongoing uncertainty around the Fed’s autonomy.
Looking ahead, gold may face some near-term consolidation as traders book profits ahead of a busy U.S. earnings calendar featuring Tesla, Alphabet, and major industrial firms like Boeing.
