(Bloomberg) -- Gold surged past $3,500 an ounce for the first time before paring some gains, as concern that President Donald Trump could fire Federal Reserve Chair Jerome Powell triggered a flight from US stocks, bonds and the dollar.

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Bullion gained as much as 2.2% on Tuesday to briefly touch $3,500, before easing as traders took profits. Safe havens such as the yen, the Swiss franc, and gold have rallied in recent sessions following Trump’s repeated calls on the Fed to cut interest rates immediately, a move seen as a threat to the central bank’s independence that drove the dollar to the lowest since 2023.

“Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever,” said Lee Liang Le, an analyst at Kallanish Index Services. “The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative,” she said.

Bullion has surged by a third in 2025 as trade tensions roiled markets and eroded trust in dollar assets, boosting some traditional havens. Flows into bullion-backed exchange-traded funds and central-bank buying have supported the upswing, with prices gaining every month this year.

The precious metal’s rally shows “that there is a desire to diversify out of dollar assets into a broader range of safe havens,” Kamakshya Trivedi, head of global FX, rates and emerging-market strategy at Goldman Sachs Group Inc, told Bloomberg TV.

Banks have become progressively more positive about gold as this year’s rally has gone from strength to strength. Among them, Goldman Sachs forecast the metal could hit $4,000 an ounce midway through next year. Gold may be “the only true safe-haven asset left” as investors question US assets, including Treasuries, according to Jefferies.

Still, the rapid recent gain has stretched some closely watched metrics, suggesting the upswing could pause at some point. Bullion’s 14-day relative-strength index — a gauge of the pace and intensity of moves — topped 78, above the level of 70 that can point to an asset being overbought.

What Bloomberg strategists say...

“Bullion is extremely overbought in the short term, which makes it ripe for a correction. That, however, is not to be mistaken for its medium-term trajectory: bullion performs best when the global economy is in distress, and the scale of current economic uncertainty is immense.”

Story Continues

Ven Ram, Macro Strategist, Dubai

Gold for immediate delivery traded 0.9% higher at $3,454.88 an ounce at 10:37 a.m. in London, easing back from its new all-time high. The Bloomberg Dollar Index was steady, Silver declined, while palladium and platinum rose.

Bullion’s jump has lifted miners’ shares. In Hong Kong, stock in Zijin Mining Group Co., a leading Chinese metals producer, surged more than 6% at one stage on Tuesday. It’s rallied by more than a quarter this year.

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