The price of gold (XAU/USD) surged to a fresh all-time high of nearly $3,375 during the early hours of the Asian trading session on Monday, following a brief period of profit-taking over the long weekend. The precious metal’s climb is fueled by ongoing uncertainty surrounding US President Donald Trump’s tariff policies, coupled with persistent geopolitical tensions that continue to support its safe-haven status.
Since January, gold prices have risen by more than 25%, as investors flock to the metal in response to growing concerns about the economic impact of tariffs. Analysts at UBS have highlighted the increasing appeal of gold, noting that the combination of rising tariff uncertainty, sluggish growth, elevated inflation, and geopolitical risks makes it a compelling asset for diversification. “The case for adding gold allocations has become more compelling than ever in this environment,” said UBS experts.
In addition, central banks, particularly in China—the world’s largest consumer of gold—have been increasing their gold reserves. China’s latest move to boost its gold holdings for the fifth consecutive month underscores its strategy to safeguard assets amid the escalating global trade and geopolitical tensions.
Meanwhile, the Federal Reserve’s recent shift toward a more hawkish stance has somewhat dampened expectations of a rate cut in June. Fed Chairman Jerome Powell’s remarks last week, combined with comments from San Francisco Fed President Mary Daly that the US economy remains strong despite slowdowns in some sectors, have added upward pressure on the US dollar. A stronger dollar could weigh on gold’s price, as the metal is priced in USD.
As the global economic and geopolitical landscape remains volatile, the allure of gold as a hedge against uncertainty seems likely to persist in the near term.