The gold price has since slipped back to about $3,437 at the time of writing. This time last year, the price was less than $2,300 per ounce.
The price of the precious metal has hit a series of record highs since US President Donald Trump introduced import tariffs on most other nations earlier this month.
The introduction of the tariffs caused stock markets to dive – and for investors to seek out safe havens, such as gold.
The latest drama across the pond came about after Trump used social media to call Federal Reserve chair Jerome Powell “a major loser” for not lowering interest rates.
The President’s clash with Powell caused US stock markets to fall further when they reopened after the Easter break. The US dollar, meanwhile, fell to 0.7451 against the pound in the early hours of this morning.
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Richard Hunter, head of markets at Interactive Investor, said: “It is unclear whether there is constitutional room to remove the Fed chair early, but in any event, the attack does little to improve the reputation of the US at a time when the validity of traditional havens such as the dollar and treasuries are being brought into question. At the same time, the volley raises doubts on the central bank’s independent status, adding a new layer of uncertainty at an inopportune time.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The tariff tug of war still has no end in sight, and now the Powell power struggle is adding more fuel to the fire, with whispers from the White House about his potential ousting rattling already jittery investors. At this rate, even bad news might be seen as a buying signal – if only because something, anything, from Washington might offer a sliver of direction.
“This lack of certainty is sending investors right into the arms of traditional safe haven assets, with gold and the Japanese yen both cashing in on the drama. Gold dazzled past $3,480 per ounce, hitting a record high as fears over trade tensions and political meddling in US monetary policy sent risk appetite packing. Not to be outdone, the yen hit a seven-month high against the dollar, with investors saying yes to safety while turning their backs on shaky sentiment in US assets.”
