Gold hits fresh all time high of $3,500/ounce amid mounting economic uncertainty

Gold prices reached record highs in both international and local markets on Tuesday, driven by mounting economic uncertainty and concerns over the independence of the U.S. Federal Reserve.

In early Asian trading, gold prices surged to $3,500 per ounce, marking a fresh all-time high. Prices cooled off a bit afterwards.

In Pakistan, the price of gold increased by PKR 5,900 to PKR 363,700 per tola.

The gold rate set by the Sarafa Association does not accurately reflect market conditions, as the yellow metal is being sold above the prescribed price. This discrepancy indicates that jewellers are capitalizing on global market volatility to maximize profits.

Dealers said the commodity was being sold at a premium, ranging between PKR 385,000 and PKR 400,000 per tola.

A dealer said trading activity slowed amid uncertainty, with fewer deals being made, and jewelry sales nearly coming to a halt.

The rally in gold prices is fueled by pressure on the Federal Reserve and its Chairman Jerome Powell. U.S. President Donald Trump has criticized Powell for maintaining elevated interest rates and accused him of lowering rates during Joe Biden’s presidency.

Trump is reportedly exploring options to replace Powell with a candidate who would prioritize slashing U.S. interest rates.

Trump’s call for immediate rate cuts has raised concerns among traders and market participants about the central bank’s independence. The U.S. Dollar Index (DXY) dropped to its lowest level since 2022, according to Bloomberg.

Gold is increasingly viewed as a safe-haven asset amid investor skepticism about U.S. assets, including Treasuries. Jefferies analysts noted that the recent selloff in U.S. Treasuries, coupled with concerns over tariffs, a trade war with China, and the U.S. fiscal situation, has solidified gold’s status as a reliable refuge for investors.