Gold prices soared to a new all-time high on Monday, driven by mounting U.S.-China trade tensions, a weakening dollar, and safe-haven demand. U.S. gold futures jumped 2.2% to $3,401.50 per ounce, while the dollar index fell to a new three-year low, making gold more attractive to international buyers.
Investor concerns are deepening over geopolitical instability and economic slowdown, with the trade war and rising stagflation risks prompting a flight to safety. Central banks continue to boost gold reserves, and holdings in gold-backed ETFs have risen for 12 consecutive weeks.
Political uncertainty added to the rally, as President Trump publicly criticized Federal Reserve Chair Jerome Powell and reportedly considered firing him—raising fears about central bank independence and monetary stability.
Meanwhile, tensions persist on multiple fronts: the U.S. escalated tariffs, China pushed back against unfair trade deals, and Russia-Ukraine ceasefire violations added to global unease. On Monday, China warned countries against striking a broader economic deal with the U.S. at its expense, a move Trump is reportedly seeking from countries looking for tariff reductions or exemptions.
While gold’s rally remains strong, technical indicators suggest it may be overbought in the short term. Still, some analysts see $3,500 as the next potential target, with Goldman Sachs projecting a possible rise to $4,000 by mid-2026.