Bullion rose by as much as 1.4% on Tuesday, marking its seventh consecutive day of advances, News.Az reports, citing Bloomberg.
The surge came after Donald Trump threatened to impose higher tariffs on South Korean goods, while a key gauge of the US dollar fell on Monday amid growing speculation that Washington may assist Japan in efforts to support the yen. A softer dollar makes precious metals cheaper for most global buyers. Silver also rallied strongly, climbing more than 7% at one point.
Gold’s dramatic ascent underscores its long-standing role as a barometer of fear in financial markets. The metal has more than doubled in value over the past two years and, after recording its strongest annual performance since 1979, has added a further 17% so far this year. Much of the buying has been attributed to the so-called debasement trade, as investors retreat from currencies and government debt. A sharp selloff in Japanese government bonds has become the latest illustration of market resistance to heavy fiscal spending.
Market sentiment has also been rattled in recent weeks by actions and rhetoric from the Trump administration, including threats to annex Greenland, talk of potential military intervention in Venezuela, and renewed criticism of the independence of the Federal Reserve. Trump’s warning to South Korea followed comments over the weekend targeting Canada, where he threatened to impose 100% tariffs if Ottawa proceeds with a trade deal with China.
Gold’s appeal is increasingly evident in speculative positioning, while options traders are bracing for further gains in a market few are willing to bet against. Implied volatility on Comex gold futures has climbed to its highest level since the peak of the Covid-19 pandemic in March 2020. Volatility has also risen sharply in State Street’s SPDR Gold Shares, the world’s largest gold-backed exchange-traded fund.
Looking ahead, investors are closely watching Trump’s choice for the next Federal Reserve chair, after the president said he has completed interviews and has a candidate in mind. Expectations that a more dovish chair could be appointed have fueled bets on additional US interest rate cuts later this year, a supportive factor for non-yielding assets such as gold, following three consecutive rate reductions.
In the near term, however, the US central bank is widely expected to pause its rate-cutting cycle at its meeting on Wednesday, as a steadier labor market restores some consensus after months of internal debate.
As of 1:00 p.m. in Singapore, gold was up 1.2% at $5,067.84 an ounce. Silver rose 4.3% to $108.25 an ounce, after reaching a record high above $117.71 in the previous session before pulling back. Platinum and palladium also advanced, while the Bloomberg Dollar Spot Index edged up 0.1% after falling 0.4% a day earlier.
