(Reuters) – Gold’s remarkable run higher is reaching new heights, with the market touching $3,500 per ounce as confidence in the U.S. economy further erodes after President Donald Trump’s renewed attack on the Federal Reserve chair.

Spot gold was trading around $3,428 per ounce by 1417 GMT, after hitting a record $3,500.05 earlier in the session.

Trump said on Monday the U.S. economy could slow down unless interest rates are lowered immediately, repeating his criticism of Fed Chair Jerome Powell as being slow to act and calling him a “major loser”.

That was followed by a furious flight from U.S. assets which undermined Wall Street and the dollar, while concerns about the independence of the Federal Reserve piled fresh pressure on Treasuries. [USD/] [MKTS/GLOB]

“Gold is recalibrating to reflect what can only be described as epic changes in the global financial system. And those changes are a widespread and fundamental shift in confidence in the world’s reserve currency and its bond markets,” said independent analyst Ross Norman.

Bullion, renowned as a hedge against uncertainties and a highly liquid asset, has surged more than $800 since the start of the year. It surpassed $3,300 last Wednesday, and its strong momentum pushed it up by nearly $200 in just a few days.

Central Bank Demand

Adrian Ash, director of research at BullionVault, said central bank demand “is very likely chasing gold’s move higher, because Trump 2.0’s chaos only hardens gold’s appeal as a geopolitical asset”.

In the final quarter of 2024, when Trump won the U.S. election, central bank purchases accelerated 54% year-on-year to 333 tons, according to an estimate from the World Gold Council.

Data showed that China’s central bank added gold to its reserves in March for the fifth straight month. China is considering setting up overseas warehouses to aid international settlement of specific products on the Shanghai Gold Exchange, its central bank said.

Likely to Be Short-Lived

Earlier this month, Goldman Sachs increased its year-end gold forecast to $3,700. It added that if central bank buying averages 100 tonnes/month, it estimates gold could reach $3,810 by end-2025.

ANZ last week also raised its year-end gold price forecast to $3,600.

Asked about a pause in the rally, analysts and experts said any correction is likely to be short-lived, and greater gains are most likely on the horizon if instability persists.

“It is hard just now to see a scenario where gold could correct sharply lower as a physical floor of Johnny-come-lately buyers would support or cushion the decline,” said Norman.

Julius Baer analyst Carsten Menke said a major road block for gold “would be a less confrontative President Trump, either on the side of trade or on the side of monetary policy – both of which seem rather unlikely at the moment”.

Spot gold has hit 28 record highs so far in 2025, of which 16 are above the $3,000/oz milestone. Prices are up 31% so far this year, after ending 2024 with a 27% annual rise.

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(Reporting by Ashitha Shivaprasad and Anjana Anil in Bengaluru. Editing by Veronica Brown and Jan Harvey)