Gold hits record $3,500 as Trump-Powell worry hits markets

KARACHI: Gold surged past $3,500 an ounce for the first time before paring some gains, as concern that President Donald Trump could fire Federal Reserve Chair Jerome Powell triggered a flight from US stocks, bonds and the dollar, reports Bloomberg.

Bullion gained as much as 2.2 per cent on Tuesday to briefly touch $3,500, before easing as traders took profits. Safe havens such as the yen, the Swiss franc, and gold have rallied in recent sessions following Trump’s repeated calls on the Fed to cut interest rates immediately, a move seen as a threat to the central bank’s independence that drove the dollar to the lowest since 2023.

Gold prices surged by Rs5,900 per tola in Pakistan on Tuesday, hitting yet another all-time high as the global bullion rally continues to intensify amid deepening economic uncertainty and persistent geopolitical tensions.

According to data released by the All Pakistan Sarafa Gems and Jewellers Association, the price of gold in Pakistan rose to Rs363,700 per tola, while the rate of 10-gram gold jumped to Rs311,814. This sharp increase mirrors a significant rise in global gold prices, where the metal gained $59 per ounce, settling at $3,454 per ounce, also a historic high.

The continued climb in gold prices reflects a broader global trend, driven by investor unease over economic instability, rising global debt levels, central bank gold purchases and ongoing conflicts that have increased risk-aversion in financial markets.

Bullion traders noted that the international market has remained strong for several weeks, driven by safe-haven buying as global powers remain locked in economic and geopolitical disputes, particularly the ongoing trade war between the US and China.

The imposition of new tariffs and retaliatory measures by both countries has sparked fears of a deeper slowdown in global trade.

“Gold is currently the only asset that seems to be offering any sense of security,” said a senior jeweller in Karachi. “The uncertainty around global currencies, inflation and interest rates is pushing people towards gold, which historically performs well in times of crisis.”

Since January 1, local gold prices have risen dramatically, by Rs91,100 per tola, from Rs272,600 to Rs363,700, marking an increase of over 33 per cent in just under four months. Meanwhile, global gold prices have increased by $840 per ounce, from $2,614 to $3,454 during the same period.

Analysts also pointed to increasing demand from central banks, which have been aggressively buying gold to diversify reserves away from the US dollar amid fears of further monetary tightening and economic fragmentation.

Despite the spike in gold, silver prices remained unchanged in the domestic market. The rate of silver stood at Rs3,441 per tola, while the 10-gram silver price held firm at Rs2,950.

Market participants anticipate that gold prices could remain elevated or even continue rising in the short to medium term, particularly if geopolitical risks persist and the global economy shows further signs of fragility.

“Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever,” said Lee Liang Le, an analyst at Kallanish Index Services, read the Bloomberg report. “The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative,” she said.

Bullion has surged by a third in 2025 as trade tensions roiled markets and eroded trust in dollar assets, boosting some traditional havens. Flows into bullion-backed exchange-traded funds and central-bank buying have supported the upswing, with prices gaining every month this year, according to Bloomberg.

The precious metal’s rally shows “that there is a desire to diversify out of dollar assets into a broader range of safe havens,” Kamakshya Trivedi, head of global FX, rates and emerging-market strategy at Goldman Sachs Group Inc, told Bloomberg TV. Banks have become progressively more positive about gold as this year’s rally has gone from strength to strength. Among them, Goldman Sachs forecast the metal could hit $4,000 an ounce midway through next year. Gold may be “the only true safe-haven asset left” as investors question US assets, including Treasuries, according to Jefferies.

Still, the rapid recent gain has stretched some closely watched metrics, suggesting the upswing could pause at some point. Bullion’s 14-day relative-strength index -- a gauge of the pace and intensity of moves -- topped 78, above the level of 70 that can point to an asset being overbought.

Gold for immediate delivery traded 0.9 per cent higher at $3,454.88 an ounce at 10:37am in London, easing back from its new all-time high. The Bloomberg Dollar Index was steady, Silver declined, while palladium and platinum rose.

Bullion’s jump has lifted miners’ shares. In Hong Kong, stock in Zijin Mining Group Co., a leading Chinese metals producer, surged more than 6.0 per cent at one stage on Tuesday. It’s rallied by more than a quarter this year, said the Bloomberg report.