Gold prices surged to a record high as a combination of U.S. dollar weakness, ongoing trade war concerns, and criticism of the Federal Reserve from President Donald Trump fueled demand for the safe-haven asset. Bullion surpassed $3,400 an ounce, driven by the U.S. currency falling to its lowest level since early 2024.
In Dubai, 24K gold was priced at Dh412 per gram, while 22K gold stood at Dh381.50. The 21K and 18K variants were retailing at Dh365.75 and Dh313.50 per gram, respectively, across the emirate.
The rally comes amid heightened uncertainty, with President Trump suggesting the possibility of firing Federal Reserve Chair Jerome Powell and calling for lower interest rates. The tension between Trump and the Fed has raised concerns about the central bank’s independence. Fed Bank of Chicago President Austan Goolsbee warned that curtailing the Fed’s autonomy would be detrimental to the financial system.
Christopher Wong, a strategist at Oversea-Chinese Banking Corp, stated, “Firing Powell not only undermines the principle of central-bank independence, but risks politicizing U.S. monetary policy in a way that markets will find unsettling,” according to Gulf News. He added that any loss of credibility for the Fed could erode confidence in the US dollar, leading to a surge in demand for gold and other safe-haven assets.
This year’s surge in gold prices comes as ongoing trade tensions, particularly between the U.S. and China, continue to shake global markets. In particular, China recently warned against any deal that would disadvantage its interests. Additionally, upcoming data, including updated forecasts from the International Monetary Fund, could heighten concerns about a global economic slowdown.
Gold’s strong performance has been supported by increasing inflows into bullion-backed exchange-traded funds (ETFs), which have seen growth for 12 consecutive weeks—marking the longest streak since 2022. Central banks around the world have also been adding gold to their reserves, further boosting demand.
Analysts are increasingly optimistic about gold’s prospects. Goldman Sachs Group Inc. has forecast that the metal could reach $4,000 per ounce by mid-2026.
At the close of trading in Singapore, spot gold had surged as much as 1.8%, reaching $3,385.98 an ounce, before stabilizing at $3,385.77. The Bloomberg Dollar Spot Index fell by 0.9%. Meanwhile, silver, which had initially dipped, reversed course to rise more than 1%, and platinum gained, while palladium saw a decline.
Gold’s rally shows no signs of slowing as investors seek shelter from geopolitical and economic uncertainties, further solidifying the precious metal’s status as a go-to asset in times of crisis.
