Trump has launched repeated attacks on the Federal Reserve’s chair, Jerome Powell, and recently attempted to fire one of its governors, Lisa Cook.
Derren Nathan from Hargreaves Lansdown said it was Trump’s “attempts to undermine the independence of the Federal Reserve Bank” that was “driving renewed interest in safe haven assets including gold”.
On Monday, the head of the European Central Bank Christine Lagarde warned that if Trump were to undermine the independence of the Fed, it would represent a “very serious danger” to the global economy.
She said if the Fed was forced to respond to Trump’s politics, it would have a “very worrying” impact on economic stability in the US, and therefore in the rest of the world as well.
Mr Ash added that when the price of gold surges because of investor interest, it was usually tempered by a slowdown in buying from China and India – two of the biggest markets for gold jewellery.
But this time, he said gold was continuing to find demand in China and India as, rather than exiting the market during times of high prices, jewellery buyers turn towards buying investment gold products such as bars or coins.