Gold price surpasses record level of $3,500/ounce

Gold soared to a new all-time high of $3,501.59 an ounce, surpassing its previous record in April, during early trading in Asia on Tuesday. Investors are buying the yellow metal, turning away from the dollar, a competing safe-haven asset, due to expectations of lower U.S. interest rates and concerns over the independence of the Federal Reserve (Fed).

The U.S. justice system has yet to rule on the fate of Federal Reserve Governor Lisa Cook, whom Donald Trump wants to remove, thereby threatening the independence of the institution that he wants to see lower rates. Facing a struggling U.S. economy, the market is, in any case, betting on a 0.25 percentage point cut at the next Fed meeting on Sept. 16 and 17.

This outlook is weakening the dollar and bond yields, which are considered safe havens just like gold, so investors are turning more toward this precious metal. As a result, gold soared to $3,501.59 an ounce (31.1 grams), beating its previous record from April of $3,500.10, which at the time was driven by uncertainty surrounding U.S. trade policy.

A U.S. federal appeals court ruled Friday that a large portion of the tariffs imposed by Donald Trump was illegal. This news boosts gold because it "introduced a new dose of uncertainty to the markets, which could only be resolved by a forthcoming Supreme Court decision," notes Russ Mould, analyst at AJ Bell. If confirmed, such a decision could benefit U.S. assets in the long term, but in the short term, it unsettles companies, making them hesitant to invest.

Finally, the price of gold, considered an effective hedge against inflation, has also been "supported by persistent U.S. inflation" in August, according to the PCE index published Friday, adds Hansen. Since the start of the year, the price of gold has increased by about a third, amid geopolitical uncertainties — including the wars in Ukraine and Gaza — and commercial ones, as the U.S. administration vacillates on tariffs.