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Global gold markets witnessed a historic surge on Tuesday, with spot prices climbing above $3,500 per ounce for the first time. The precious metal rose as much as 2.2% before easing slightly as some traders took profits. The rally was triggered by escalating political tensions in the United States, where reports suggested that President Donald Trump might dismiss Federal Reserve Chair Jerome Powell. The resulting uncertainty shook investor confidence, sending ripples through stock, bond, and currency markets.
Safe-haven demand surged in response, with gold leading the charge alongside the Japanese yen and Swiss franc. As the U.S. dollar slipped to its weakest level since 2023, investors looked for alternatives to dollar-denominated assets.
Political Risk Spurs Flight to Safety
Concerns over central bank independence are being amplified by Trump’s calls for immediate rate cuts, pressuring the Federal Reserve in an unprecedented way. Analysts say this level of political interference is spurring fear among global investors, driving them toward traditional safe-haven assets.
Lee Liang Le, an analyst at Kallanish Index Services, noted, “Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever. The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative.”
This dramatic shift in sentiment has driven gold up by more than 33% in 2025, with consistent gains recorded every month so far.
Pakistan Mirrors Global Bullion Boom
In tandem with global price movements, Pakistan also recorded unprecedented gold price increases. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of one tola of gold surged by Rs5,900 on Tuesday to reach a new record of Rs363,700. The 10-gram gold rate also hit a high of Rs311,814.
This followed Monday’s steep increase of Rs8,100 per tola, setting off a two-day record-breaking rally in local markets. Cumulatively, gold in Pakistan has risen Rs91,100 per tola since December 30, 2024, when it was trading at Rs272,600 — a staggering 33% increase year-to-date.
Meanwhile, silver prices remained steady at Rs3,441 per tola, showing that gold remains the primary safe-haven focus among local investors.
Global Analysts Predict Further Upside
The rally in bullion has led to bullish forecasts from major financial institutions. Goldman Sachs has projected that gold could hit $4,000 per ounce by mid-2026, citing ongoing global tensions and a lack of confidence in U.S. assets, including Treasuries.
Kamakshya Trivedi, Head of Global FX and EM Strategy at Goldman Sachs, told Bloomberg, “There is a growing desire to diversify out of dollar assets into a broader range of safe havens.”
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Jefferies analysts echoed this sentiment, calling gold “the only true safe-haven asset left” in a market clouded by political and economic uncertainty.
Market Indicators Signal Possible Pause
Despite the excitement, technical indicators suggest the rally could be overextended in the short term. Gold’s 14-day Relative Strength Index (RSI) rose above 78 — significantly above the 70 threshold that typically signals an overbought asset.
Still, the broader upward momentum remains intact. As of 10:37 am London time on Tuesday, gold for immediate delivery was up 0.9% at $3,454.88 per ounce, slightly below its peak. The Bloomberg Dollar Index remained steady, while silver dipped and both platinum and palladium posted gains.
Miners Benefit as Shares Rally
The gold rally has also boosted the equity market performance of major mining companies. In Hong Kong, shares in Zijin Mining Group Co., one of China’s top metal producers, surged over 6% at one point on Tuesday. The stock has now rallied more than 25% since the start of the year, according to Bloomberg.
This rise in miners’ valuations reflects growing investor confidence in the precious metals sector as global financial uncertainty fuels demand.
