Gold Shocks Markets by Surpassing $3,500: Is $4,000 Next?
Unprecedented Rally Beats Forecasts by Eight Months Amid Political and Economic Uncertainty
Topic
Safe-Haven Asset Takes the Lead
Safe-Haven Asset Takes the Lead
Gold has soared to an all-time high, exceeding $3,500 per ounce, reflecting growing market anxiety and declining confidence in traditional assets.
The sharp rise follows increasing concerns over U.S. monetary policy independence,
especially after former President Donald Trump hinted at the potential dismissal of Federal Reserve Chair Jerome Powell
if interest rates are not cut swiftly.
In response, investors flocked to gold, pulling back from stocks, bonds, and the U.S. dollar.
The precious metal jumped 2.2% on Tuesday, following a 2.9% gain the previous day,
while the dollar dropped to its lowest level since 2023. Trump wrote online:
“There may be an economic slowdown unless ‘Mr. Too Late’—a major loser—cuts interest rates now.”
He added: “There is virtually no inflation,” citing lower energy and food prices.
Time Outpaces Projections
Remarkably, gold’s surge to $3,500 came eight months earlier than leading financial institutions had forecast.
UBS strategist Joni Teves had recently predicted that gold would reach this level by December 2025,
while analysts at Goldman Sachs, including Lina Thomas, projected prices could touch $3,700 by year-end, according to Bloomberg.
This surprise leap marks a 30% increase in gold prices since the beginning of 2025,
driven by intensifying political and trade tensions, eroded confidence in dollar-denominated assets,
and significant inflows into gold-backed ETFs. Continuous central bank purchases have further reinforced the upward momentum.
Gold Shocks Markets by Surpassing $3,500: Is $4,000 Next?