The gold price is surging as economic uncertainty drives investors toward safe havens. On Wednesday, gold surpassed $3,550 per ounce, setting an all-time high. Over the past year, the precious metal has jumped nearly one-third in value, and analysts believe the rally could continue as geopolitical tensions remain unresolved.
Why Investors Choose Gold
Gold has always been the go-to asset when markets get shaky. Tim Waterer, chief market analyst at KCM Trade, explained it simply: “Financial markets hate uncertainty, and in such scenarios, gold is usually the safe choice.” Wars in Ukraine and Gaza, coupled with Donald Trump’s tariff battles, have amplified global unease. As a result, many investors now see gold as more stable than stocks or currencies.
How Investors Buy Gold
Investors purchase gold in two main ways: physical bullion and financial products. Bullion includes bars, coins, or jewellery. Financial options, like gold futures or exchange-traded funds (ETFs), allow institutions to trade without physically storing the metal.
Since gold is priced in U.S. dollars, its value often rises when the dollar weakens. That inverse relationship makes gold particularly appealing during times of currency instability.
Trump’s Influence on Gold
Donald Trump’s policies have played a huge role in the latest rally. His “Liberation Day” tariffs shook global trade confidence, while his attacks on the U.S. Federal Reserve fueled doubts about economic stability. Analysts note that Trump’s push for lower interest rates and a weaker dollar directly boosts gold’s appeal. When traditional interest-bearing assets yield less, gold suddenly looks far more attractive.
Global Factors Supporting Gold
It’s not just U.S. politics driving prices. Weak currencies in the U.K. and Japan, coupled with political instability, have encouraged investors to seek protection in gold. Tim Waterer pointed out that gold acts as a shield against inflation because its supply is finite.
Meanwhile, countries holding vast U.S. dollar reserves are also shifting strategies. Kyle Rodda, senior analyst at Capital.com, explained that governments wary of U.S. bonds under Trump are buying gold instead, further pushing up demand and prices.
Outlook for the Gold Market
With multiple regions facing economic strain and political unrest, analysts expect the gold rally to remain strong. While markets may shift, investor confidence in gold as a stable store of value shows no signs of fading.
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