Gold prices skyrocketed to an unprecedented $3,500 per ounce on Tuesday as investors sought refuge from market volatility fueled by U.S. President Donald Trump's renewed attacks on the Federal Reserve and lingering trade tensions. The surge in gold, alongside a rally in the Japanese yen, underscored a flight to safety amid fears of political interference in U.S. monetary policy.
European stock markets wavered during midday trading following the Easter holiday break, while Asian indices closed unevenly. Oil prices edged higher, and the dollar exhibited mixed performance against major currencies. All eyes now turn to the International Monetary Fund's updated growth forecasts, expected to address the global economic ripple effects of escalating trade disputes.
Trump'Social platform criticizing Fed Chair Jerome Powell as a 'major loser' and pushing for preemptive rate cuts intensified concerns about institutional stability. Analysts warned that attempts to remove Powell could trigger a crisis of confidence. 'Firing Powell would unleash chaos in U.S. assets,' said Pepperstone strategist Michael Brown, predicting a potential collapse in equities, Treasuries, and the dollar.
The White House has reportedly explored legal avenues to replace Powell, according to adviser Kevin Hassett. Monday saw Wall Street tumble, with major indices dropping 2.5% as investors braced for heightened uncertainty. Meanwhile, Trump's assertion that inflation is 'virtually' nonexistent clashed with market realities, adding fuel to the debate over the Fed's independence.
With trade tensions and political risks clouding the outlook, analysts urge caution. 'Investors are clinging to traditional safe havens like gold until clarity emerges,' remarked Hargreaves Lansdown analyst Matt Britzman. As the IMF prepares its assessment, the world watches whether global growth can withstand these intertwined challenges.
