In brief
In a significant financial milestone, gold has surged to a record price of $3,508.50 per ounce. Analysts attribute this rise to continued economic uncertainty and expectations of interest rate cuts by the US central bank, making gold a more appealing investment. The escalating trade tensions and political dynamics surrounding the Federal Reserve, particularly under President Trump's administration, have also fueled demand. Importantly, both China and India are seeing increased interest in gold products, indicating robust global appetite despite price fluctuations.
The price of gold has hit a record high as demand for the precious metal remains strong amid global economic uncertainty.
The spot gold price hit $3,508.50 per ounce early on Tuesday, continuing its upwards trend which has seen it rise by nearly a third this year.
The precious metal is viewed as a safer asset for investors during times of economic uncertainty, and its price rose earlier this year after US President Donald Trump announced wide-ranging tariffs which have upset global trade.
Analysts say the price has also been lifted by expectations that the US central bank will cut its key interest rate, making gold an even more attractive prospect for investors.
Adrian Ash, director of research at BullionVault, told the BBC's Today programme that the rise in gold prices over the past few months is primarily due to Trump's influence on geopolitics and global trade.
It was really the US election last year that put a fire under it, he said.
Concerns regarding the independence of the US central bank, the Federal Reserve, are also driving up gold prices.
Trump's repeated criticisms of Fed Chair Jerome Powell and his recent attempts to dismiss one of its governors, Lisa Cook, have heightened economic anxieties.
Derren Nathan from Hargreaves Lansdown noted that Trump's actions to undermine the Federal Reserve's credibility have revived interest in safe haven assets, particularly gold.
Christine Lagarde, head of the European Central Bank, has cautioned that undermining the Fed's independence could pose serious risks to global economic stability.
Despite the typical demand drop during high price phases, the rise in gold prices has not deterred buyers in China and India; rather, they are shifting towards investment gold products like bars and coins.
