Gold has returned to its record-breaking routine this week as escalating geopolitical tensions and falling interest rates sent the metal to new highs.
The yellow metal was closing in on $4,500 on Tuesday morning, reaching highs of $4,497 in early trading. On Monday, the price of an ounce of gold crossed the $4,400 mark for the first time.
Meanwhile silver circled the $70 mark, reaching a high of $69.44.
“Gold and silver prices have surged to record highs as expectations of further Fed rate cuts, escalating geopolitical tensions, strong central bank and ETF demand, and robust industrial use – particularly for silver – drive investors towards safe-haven assets over yield,” Axel Rudolph, senior technical analyst at IG.
Gold’s latest rally follows President Donald Trump’s blockade and seizure of Venezuelan oil tankers.
Investors have rushed amid concern that other assets – such as US stocks or the dollar – could become more volatile amidst rising tensions.
The DXY index, which tracks the dollar against a basket of currencies, fell 0.2 per cent on Tuesday morning to 98.09 after hitting previous highs of 98.73 the day prior.
Trump has confirmed the US is pursuing a third tanker after already seizing two this month, with the White House claiming the Venezuela was using oil-money from the tanker to fuel drug-related crime.
Gold and oil rally as Trump piles pressure
Trump has said the US plans to hold onto any assets seized, adding he has been in contact with “big” American oil companies.
“We’re going to keep it… maybe we’ll sell it, maybe we’ll keep it”, he said.
“Maybe we’ll use it in the strategic reserves. We’re keeping it, we’re keeping the ships also.”
The price of a barrel of brent crude oil spiked on the news to highs of $77 but have since given up some gains.
The price of gold has already risen over 70 per cent since Trump unleashed a global trade war in April.
The yellow metal has also been boosted by the Federal Reserve’s latest decision to cut interest rates.