Gold prices shattered records on Tuesday, soaring past the psychologically significant $3,500 mark, as market tensions flared following fresh criticism of the Federal Reserve from U.S. President Donald Trump. The renewed political pressure has sparked concerns about central bank independence and sent investors scrambling for safety.

Spot gold jumped 2.2% to trade at $3,493.41 an ounce by 06:20 GMT, after briefly hitting a record high of $3,500.05 earlier in the session. The rally extends a powerful uptrend that has seen the precious metal gain nearly 33% year-to-date.

"Investors have been increasingly hesitant towards U.S. assets due to ongoing tariff tensions and the growing uncertainty surrounding Trump’s clashes with the Fed," said Tim Waterer, Chief Market Analyst at KCM Trade. "That’s put gold in a prime spot to benefit as a haven asset."

On Monday, Trump repeated his demand for immediate interest rate cuts, arguing that tighter monetary policy could stall economic momentum. His remarks were particularly pointed at Fed Chair Jerome Powell, whose more cautious stance has irked the White House. Trump’s comments came alongside warnings that his trade tariffs might strain the economy further.

The escalating rhetoric weighed heavily on investor sentiment, pushing Asian equity markets lower and weakening the U.S. dollar. The sell-off in U.S. assets was swift, with risk aversion driving capital flows into gold.

Adding to the tension, Beijing accused the U.S. of misusing tariffs and warned other nations against engaging in economic pacts that could disadvantage China. This reinforced broader fears about geopolitical instability and the durability of global growth.

Despite the rally, technical indicators suggest gold may be due for a short-term correction. The metal’s Relative Strength Index (RSI) has surged to 79, a level typically seen as overbought. However, analysts believe any pullbacks could be shallow, given the strong appetite for gold amid prevailing market uncertainty.

"Even if prices retrace slightly, underlying demand for safe-haven assets is likely to remain firm as long as macroeconomic risks stay elevated," Waterer added.

Market watchers are now turning their attention to a series of upcoming speeches from Federal Reserve officials later this week, looking for clues about the central bank's direction and how it plans to navigate the growing pressure from the White House.

For now, gold’s record-breaking run underscores the nervousness gripping global markets—and the extent to which investors are seeking stability in an increasingly unpredictable landscape.

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