Gold prices (XAU/USD) surged to a new all-time high near $3,375 during the early Asian trading session on Monday, following a brief period of profit-taking over the long weekend. This rise comes amid ongoing concerns over US President Donald Trump’s tariff policies and persistent geopolitical instability, which continue to support demand for the precious metal as a safe-haven asset.
The increasing uncertainty surrounding tariffs and their potential economic impact has led investors to seek refuge in gold, contributing to a more than 25% price increase since January. UBS analysts noted, “The case for adding gold allocations has become more compelling than ever in this environment of escalating tariff uncertainty, weaker growth, higher inflation, geopolitical risks, and diversification away from US assets and the US dollar.”
Moreover, central banks, including China—the world’s largest gold consumer—have been steadily increasing their gold holdings. China, for instance, added to its gold reserves for the fifth consecutive month, highlighting the growing demand for the metal as a hedge against global trade and political volatility.
On the flip side, the Federal Reserve’s recent shift in tone, with Chairman Jerome Powell signaling a more hawkish stance, has reduced expectations for a rate cut in June. San Francisco Fed President Mary Daly also expressed confidence in the US economy, despite some sectoral slowdowns. These developments could strengthen the US dollar and apply downward pressure on the price of gold, which is typically priced in dollars.
