Gold prices soared to record levels in Asia on Monday, driven by escalating geopolitical tensions and concerns over potential interference in U.S. monetary policy. The surge follows a string of volatile developments across global markets, including critical remarks from former U.S. President Donald Trump directed at the Federal Reserve.
In Dubai, the Dubai Jewellery Group reported that 24K gold was trading at Dh405.25 per gram on Monday morning. Other variants also saw strong pricing, with 22K at Dh375.25, 21K at Dh360.00, and 18K gold at Dh308.50 per gram.
Internationally, gold prices surged to an all-time high of $3,370.17 per ounce in Asian markets. Analysts attribute the rally to heightened market anxiety over geopolitical developments and speculation that political influence could compromise the independence of the U.S. Federal Reserve.
Charu Chanana, chief investment strategist at Saxo in Singapore, noted that global markets are already grappling with multiple sources of uncertainty. “Markets are on edge due to geopolitical tensions, and now concerns are growing that Trump’s comments about the Fed could create further instability,” Chanana said. “Any signs of political pressure on monetary policy could undermine the Fed’s independence and complicate the path ahead for interest rates.”
The timing of the price spike also coincides with a long weekend in many Western markets due to the Easter holiday, resulting in lower trading volumes that may have amplified price movements.
Looking ahead, several financial institutions have adjusted their gold outlooks in response to the evolving market dynamics. Both Saxo Bank and Citi Research recently raised their gold price forecasts for 2025 to $3,500 per ounce, citing increased demand for safe-haven assets and expectations of looser monetary policy.
According to Saxo Bank, the futures market is currently pricing in the likelihood of a 75 to 100 basis point cut in U.S. interest rates by the end of the year. “Lower interest rates reduce the opportunity cost of holding gold, which does not yield interest, thereby supporting its value in uncertain times,” the bank stated.
With markets facing a complex mix of economic and political challenges, analysts expect continued investor interest in gold as a hedge against volatility.
