Gold prices surged to an all-time high on Monday, climbing above $3,600 an ounce as investors increased bets that the US Federal Reserve will cut interest rates this month. The precious metal, long regarded as a safe-haven asset, has drawn renewed demand amid a weaker dollar and mounting uncertainty over the global economic outlook.
Spot gold rose 0.8 per cent to $3,614.24 an ounce, extending a rally that has seen prices gain more than 35 per cent since the start of 2025. Analysts say concerns about US trade tensions, elevated inflation, and questions over the dollar’s long-term dominance are prompting both institutional and retail investors to boost their gold holdings.
Central banks have also been adding to reserves, seeking protection against policy volatility. The momentum underscores a wider flight from dollar-denominated assets, with bullion emerging as one of the few reliable hedges against economic and political instability.
The rally comes on the heels of a warning from Goldman Sachs, which last week suggested gold could rise toward $5,000 an ounce if political pressure continues to weigh on the Federal Reserve. The bank’s analysts cautioned that sustained criticism of the Fed by President Donald Trump could threaten the central bank’s independence, weakening confidence in its ability to manage inflation effectively.
“Gold’s strength is reflective of a broader loss of faith in traditional policy anchors,” said one market strategist. “If investors believe the Fed cannot act decisively due to political pressure, the natural hedge becomes gold.”
The surge highlights the delicate balance the Federal Reserve faces ahead of its policy meeting later this month. While inflation remains higher than the Fed’s target, calls for interest rate cuts are intensifying amid slowing growth indicators and heightened market volatility. Any move to ease policy risks further criticism from the White House while potentially undermining the central bank’s credibility with investors.
At the same time, global tensions—from uneven post-pandemic recovery to trade disputes—are compounding the sense of caution in financial markets. The dollar index has slipped in recent weeks, further enhancing the appeal of gold for investors seeking security.
Analysts believe bullion’s upward momentum could persist if uncertainty deepens. “With inflation elevated, political scrutiny mounting, and the Fed walking a fine line, gold remains one of the clearest beneficiaries,” said another commodities analyst.
For now, the record-breaking rally signals just how nervous investors have become about the interplay of US monetary policy and political influence. Whether gold climbs further may depend less on inflation data and more on how much confidence markets retain in the independence of the world’s most powerful central bank.
