Gold prices were surging above $4,000 per ounce on Tuesday for the first time ever, as escalating political tension in the United States and renewed fears over global financial stability drove investors out of risk assets and into safe havens. Spot gold jumped more than 3% in intraday trading, building on a rally that has lifted the metal over 50% since January.
The latest rally comes as markets brace for potential Federal Reserve rate cuts later this year and as investors increasingly view bullion as a hedge against policy and geopolitical chaos.
Reuters noted that U.S. Treasury yields have eased on safe-haven flows, while exchange-traded funds linked to physical gold saw their biggest inflows since mid-2023.
Analysts said central banks, particularly in Asia and the Middle East, continue to expand their holdings amid concerns about the dollar’s long-term stability.
The run on gold also reflects the growing scale of U.S. holdings. Recent data show that the value of America’s gold reserves has now exceeded $1 trillion for the first time, driven by price appreciation rather than new acquisitions. Globally, precious metal markets have strengthened across the board as investors hedge against inflation, currency risk, and geopolitical uncertainty, with silver and platinum also hitting multi-year highs.
Adding to the volatility, President Donald Trump intensified his political standoff with Democratic leaders on Tuesday, calling for the jailing of Illinois Governor J.B. Pritzker and Chicago Mayor Brandon Johnson while preparing to deploy National Guard troops to Chicago. Reuters reported that the White House cited “public safety concerns” following days of unrest. Legal experts warned that the move could spark a constitutional confrontation if the Insurrection Act is invoked.
By Charles Kennedy for Oilprice.com
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