Gold price scales $3,400 as global trade, geopolitical risks intensify

Gold surged above $3,400 to a new record on Monday, as a fresh bout of US dollar weakness, uncertainty over the US-China trade tensions, and an end to the Russia-Ukraine ceasefire, spurred demand for the safe-haven metal.

Spot gold rose more than 3% to a new all-time peak on Monday and were already adding to gains in overnight Asian trading to a new record of $3,436.01.

The most active US gold futures contract closed at $3,425.30 per ounce on Monday, a more than $100 or over 3% jump over the prior settlement. In evening trade gold for June delivery continued to rally touching a new record high of $3,455.90 an ounce.

Gold has now also surpassed the record set in 1980 on an inflation-adjusted basis when the precious metal traded at $850 per ounce early in the year.

In an earlier April report Reuters quoted HSBC analyst James Steel as saying the issues driving gold 45 years ago – most notably the Iranian Revolution and the oil crisis – were remedied relatively quickly, leading gold to decline, HSBC’s Steel said.

“But the breakdown in international cooperation in the last few years has led to gold staying permanently high,” he said. “It leads one to think… there is a bigger geopolitical bid in the market.”

The dollar continued to tumble as investor confidence in the US economy took another hit over President Donald Trump’s comments about Federal Reserve chairman Jerome Powell.

“Firing Powell not only undermines the principle of central bank independence, but risks politicizing US monetary policy in a way that markets will find unsettling,” said Christopher Wong, strategist at Oversea-Chinese Banking Corp., in a Bloomberg note.

“If the Fed’s credibility is called into question, that could erode confidence in the dollar and accelerate flows into havens, including gold,” he added.

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Gold has now gained more than $700 or 27% since the start of 2025, scaling multiple records along the way, as rising uncertainty over the global trade war drove more and more investors toward bullion as a hedge.

Holdings in gold-backed exchange-traded funds have risen for the past 12 weeks, the longest run since 2022. Central banks have also been adding the metal to their reserves, underpinning robust worldwide demand.

Last week, the yellow metal surpassed $3,300 an ounce as the Sino-US trade conflict ramped up, and the strong momentum has now pushed it up by another $100 in just a few days.

Banks have become progressively more positive about gold’s prospects as this year’s rally has gone from strength to strength. Among them, Goldman Sachs Group forecast the metal could hit $4,000 midway through next year.

(With files from Bloomberg and Reuters)

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