Gold price reaches $3,500 for the first time

Gold remains in demand on the international financial markets mainly because of the erratic US economic policy of US President Donald Trump. On Tuesday, the price for an ounce (about 31.1 grams) rose for the first time in history to 3,500 US dollars (3,081 euros) in the early morning. This is an increase of more than 2 percent compared to the previous evening. On Monday, the gold price had increased by almost 3 percent.

US Monetary and Economic Policy in Focus

One reason for the recent gains is a new attack by US President Donald Trump on US Federal Reserve Chairman Jerome Powell. Trump once again demanded a rate cut from the Fed and called Powell "Mr. Too Late" and a "big loser." Powell does not want to cut rates for the time being due to inflation risks following Trump's tariff broadside. Economists are also warning that a consequence of the international trade conflict triggered by Trump could be slower economic growth or even a recession in the US.

Meanwhile, lower interest rates could accelerate inflation. Trump claimed that there is currently almost no inflation and that the absence of a rate cut could slow down the economy. However, US consumer prices rose by 2.4 percent in March compared to the previous year.

Experts also fear an inflation surge if companies pass on the higher costs from Trump's tariffs to consumers. With "Mr. Too Late," Trump was referring to criticism that Powell waited too long to raise rates during the price increase in the coronavirus pandemic.

Gold Price Increased by Almost 12 Percent Since End of March

The gold price had accelerated its previously months-long rally in April due to aggressive US tariff policy and fears of a global recession. Since the end of March, the gold price has increased by almost 12 percent. In the current year, the price has risen by about a third, after gold became 27 percent more expensive in 2024.

(APA/Red)

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