Gold climbs above $3,500 for first time as Wall Street rallies after slide | Gold

Gold has climbed above $3,500 an ounce for the first time while stocks on Wall Street and the dollar rose following Monday’s sell-off that was prompted by Donald Trump’s blistering attack on the Federal Reserve chair, Jerome Powell, caused alarm among investors.

Spot gold reached the record price of $3,500.01 on Tuesday, extending a rally that has pushed bullion up from $2,623 an ounce at the start of this year. Analysts now predict the metal could even reach $4,000 only a matter of weeks after the price moved through $3,000 for the first time.

The US currency and its government debt are usually seen as a safe haven during times of market turmoil, but as the US itself has caused much of the recent volatility investors have been turning to another “port in the storm”, gold, in large numbers.

Trump’s tariffs have unleashed a “major negative shock” into the world economy, the International Monetary Fund warned on Tuesday, as it cut its forecasts for US, UK and global growth.

Most major European markets close up slightly on Tuesday, and US markets opened higher, recovering most of the previous day’s losses on Wall Street.

The Dow Jones Industrial Average, which tracks 30 large US companies, the broader S&P 500 and the Nasdaq were all up about 2% by early afternoon on Wall Street.

The FTSE 100 index in London rose by 0.6% – its highest close in more than two weeks – while Germany’sDAX and France’s CAC were up about 0.5%. Many Asian markets, including Japan’s Nikkei, also closed modestly lower.

Traders are anxious after the US president intensified his attacks on America’s top central banker, calling Powell “Mr Too Late” and “a major loser” for not lowering interest rates.

This pushed the dollar down against a basket of currencies to its lowest level since March 2022 on Tuesday morning, although it was up by 0.2% by the afternoon.

Russ Mould, investment director at AJ Bell, said: “Persistent comments from President Donald Trump, which put the independence of the US Federal Reserve in question, resulted in weakness in the dollar, US Treasuries and Wall Street overnight.

“If the administration is able or willing to follow through on its threat to fire Fed chair Jerome Powell before his term is up next year, it could provoke an even stronger reaction amid fears about the implications for inflation.”

The pound was little changed on Tuesday afternoon after hitting a seven-month high of $1.3423 earlier in the day.

Stephen Innes, managing partner at the Swiss wealth management firm SPI Asset Management, said: “This is about more than Trump vs Powell. It’s about every corner of fiscal and monetary policy flashing one big red warning: confidence erosion.”