Investing.com--Gold prices surged to hit a new record high Tuesday, buoyed by sustained safe-haven appeal over elevated U.S.-China trade tensions, and concerns around President Donald Trump’s plan to overhaul the Federal Reserve.
At 09:15 ET (13:15 GMT), Spot Gold rose 0.6% to $3,442.48 per ounce, while Gold Futures expiring in June surged 0.9% to $3,455.90 an ounce.
Gold reached $4,500 an ounce earlier in the session. having jumped more than 3% on Monday. It has hit consecutive record highs in the previous three sessions, driven largely by escalating geopolitical risks, strong central bank demand, and persistent inflation concerns.
Trump mulls ousting Fed’s Powell, dollar hits 3-yr low
The latest rally was sparked by concerns surrounding U.S. monetary policy, after President Donald Trump continued to criticise the Federal Reserve, and the leadership of Chair Jerome Powell, in particular.
White House economic adviser Kevin Hassett said on Friday that President Trump and his team were continuing to study whether they could fire Fed Chair Jerome Powell.
"Gold surged to new record highs as President Trump threatened to fire US Federal Reserve Chair Jerome Powell, sparking a flight to safe-haven assets," said analysts at ING, in a note.
Trump on Monday reiterated his call for the Fed to reduce rates, saying the U.S. economy could slow down if the Fed does not cut interest rates immediately.
Last week, Powell said that the central bank was not inclined to cut interest rates in the near future, citing the possible inflationary pressures and economic uncertainties stemming from the new tariffs.
These developments have stoked concerns about the independence of the Fed, sending ripples through financial markets.
The U.S. dollar remained weak after slumping to a three-year low on Monday against a basket of major currencies.
A weaker dollar tends to bolster demand for gold, as it makes the metal more affordable to investors holding foreign currencies.
Exchange-traded funds at record highs
Exchange-traded fund holdings in gold are at their highest levels since September 2023. In U.S. dollar terms, though, this position is at a record high, given the strength in prices.
Spot gold is up more than 30% so far this year, making it the best-performing commodity.
Meanwhile, COMEX gold inventories continue to trend lower, falling by almost 2 million ounces since early April to a little under 43.1 million ounces. This decline comes as the arb into New York turns negative at times following news that gold is exempt from tariffs.
U.S.-China trade tensions remain elevated
China issued a stern warning to nations contemplating trade agreements with the U.S. that could undermine Chinese interests.
The Chinese Ministry of Commerce accused Washington of employing tariffs and monetary sanctions to coerce countries into limiting their trade with China.
Beijing emphasized that any such agreements detrimental to its interests would prompt reciprocal countermeasures.
This warning comes amid escalating tensions in the ongoing Sino-U.S. trade conflict, which has seen the U.S. impose tariffs of up to 145% on Chinese goods, leading to retaliatory duties from China.
Among other precious metals, Silver Futures gained 0.3% to $32.620 an ounce, while Platinum Futures fell 0.6% to $961.85 an ounce.
Copper hits 2-week high on weaker greenback
Copper prices extended on Tuesday to hit a two-week high as the greenback remained weak, but concerns of hefty U.S. tariffs on top importer China kept investors cautious.
Benchmark Copper Futures on the London Metal Exchange rose 1.3% to $9,346.00 a ton, while Copper Futures expiring in May gained 1.4% to $4.7960 a pound.
(Ayushman Ojha contributed to this article.)