Gold Hits $3,500 as Trump’s Fed Broadside Sparks Flight to Haven

(Bloomberg) — Gold surged previous $3,500 an oz for the primary time earlier than paring some beneficial properties, as concern that President Donald Trump may hearth Federal Reserve Chair Jerome Powell triggered a flight from US shares, bonds and the greenback.

Bullion gained as a lot as 2.2% on Tuesday to briefly contact $3,500, earlier than easing as merchants took income. Protected havens such because the yen, the Swiss franc, and gold have rallied in latest periods following Trump’s repeated calls on the Fed to chop rates of interest instantly, a transfer seen as a menace to the central financial institution’s independence that drove the greenback to the bottom since 2023.

“Gold’s fast ascent this yr tells me that markets have much less confidence within the US than ever,” stated Lee Liang Le, an analyst at Kallanish Index Companies. “The ‘Trump Commerce’ narrative has advanced right into a ‘promote America’ narrative,” she stated.

Bullion has surged by a 3rd in 2025 as commerce tensions roiled markets and eroded belief in greenback property, boosting some conventional havens. Flows into bullion-backed exchange-traded funds and central-bank shopping for have supported the upswing, with costs gaining each month this yr.

The valuable steel’s rally exhibits “that there’s a need to diversify out of greenback property right into a broader vary of protected havens,” Kamakshya Trivedi, head of world FX, charges and emerging-market technique at Goldman Sachs Group Inc, informed Bloomberg TV.

Banks have turn out to be progressively extra optimistic about gold as this yr’s rally has gone from power to power. Amongst them, Goldman Sachs forecast the steel may hit $4,000 an oz halfway by way of subsequent yr. Gold could also be “the one true safe-haven asset left” as traders query US property, together with Treasuries, in line with Jefferies.

Nonetheless, the fast latest achieve has stretched some carefully watched metrics, suggesting the upswing may pause in some unspecified time in the future. Bullion’s 14-day relative-strength index — a gauge of the tempo and depth of strikes — topped 78, above the extent of 70 that may level to an asset being overbought.

What Bloomberg strategists say…

“Bullion is extraordinarily overbought within the brief time period, which makes it ripe for a correction. That, nonetheless, is to not be mistaken for its medium-term trajectory: bullion performs finest when the worldwide financial system is in misery, and the dimensions of present financial uncertainty is immense.”