The price of gold surged to a new record high as concerns mounted over US President Donald Trump’s intention to remove Federal Reserve Chair Jerome Powell. According to Refinitiv data, gold reached a new peak of \$3,500.05 per troy ounce earlier in the day and was last traded at \$3,479.5 per troy ounce.
Gold has appreciated over 31% this year, benefiting from Trump’s global tariff strategy. Rania Gule, a senior market analyst at XS.com, noted in a research note that the increase is driven by rising demand for safe-haven assets amid declining confidence in the US dollar and escalating geopolitical and economic risks. This rally reflects ongoing recession fears in the US economy and heightened political tensions.
In contrast, investors have been selling off bonds. The yield on 10-year Treasuries, a benchmark for various debts, increased during the trading session. Bond yields and prices move inversely.
The rise in gold prices followed a broad sell-off in the US, where all three major indexes — the Dow, the S&P 500, and the tech-heavy Nasdaq Composite — fell on Monday. Market turmoil triggered by Trump’s tariffs has intensified due to his threats to fire Powell after repeated public criticisms, leading to increased stock volatility. Trump has criticized the Fed chief for not lowering interest rates.
Last week, Powell stated at an event in Chicago that Trump’s tariffs were unprecedented in modern history, potentially causing inflation and slowing economic growth. This warning highlights that tariffs could complicate the Fed’s rate-cutting path.
Since then, Trump has repeatedly attacked Powell on social media, vowing to fire him and calling him a “loser.” Trump’s assault on the Fed’s independence has raised concerns that investors might lose confidence in the stability of US markets.
On Tuesday, Asian shares closed mostly flat. Japan’s benchmark Nikkei 225 index ended 0.2% lower, while South Korea’s Kospi was down less than 0.1%. Hong Kong’s Hang Seng index rose about 0.8%.
— new from CNN
