Gold hits record $3,516 as stocks tumble amid trade fears

Wednesday 03 September 2025 - 09:24

By: Dakir Madiha

Gold hits record $3,516 as stocks tumble amid trade fears

The price of gold surged to an unprecedented $3,516 per ounce on Tuesday, propelled by mounting economic uncertainty that drove investors away from equities. The precious metal briefly hit $3,516.31 during Asian trading before settling near $3,508.50, marking a significant milestone in its continued ascent this year.

Stocks plummet as trade tensions escalate

Wall Street opened sharply lower as it returned from the Labor Day weekend, with the Dow Jones Industrial Average losing 257.1 points (0.56%) to 45,287.73. The S&P 500 fell 0.91% to 6,401.51, while the tech-heavy Nasdaq Composite dropped 1.72% to 21,086.575.

The selloff was triggered by renewed concerns over U.S. trade policy following a federal appeals court ruling on Friday that deemed most of the Trump administration’s “reciprocal” tariffs unlawful. Although these tariffs remain in effect until October 14, pending a Supreme Court appeal, the legal uncertainty has reignited market volatility.

A Goldman Sachs report revealed that 80% of U.S. companies have already passed tariff-related cost increases onto consumers, with 21% transferring the full burden. This inflationary pressure comes as consumer spending growth slows, rising at an annualized rate of just 1% through July.

Technology stocks led the market decline, with major players such as Nvidia, Apple, Amazon, and Meta all losing more than 1%. The semiconductor sector was hit particularly hard, with the VanEck Semiconductor ETF dropping nearly 2%.

Federal Reserve under political scrutiny

Investor anxiety was further heightened by concerns over the Federal Reserve’s independence. President Trump escalated his criticism of Fed Chair Jerome Powell and recently dismissed Fed Governor Lisa Cook over alleged mortgage fraud, a move that has unsettled markets. The central bank’s autonomy is considered a cornerstone of market stability.

Despite the political pressure, markets are pricing in a 90% chance of a 25-basis-point rate cut during the Fed’s upcoming meeting on September 16–17. This expectation follows Powell’s remarks at the Jackson Hole symposium in August, where he acknowledged the growing risks to the labor market and expressed openness to policy adjustments.

Gold’s meteoric rise driven by safe-haven demand

Amid stock market turmoil, a weakening dollar, and geopolitical uncertainty, gold has emerged as the ultimate safe-haven asset. The metal has gained over 30% this year, and UBS analysts predict further records in the coming months. According to UBS strategist Joni Teves, “Gold is likely to continue its upward trajectory through the next quarters.”

Central banks worldwide are also driving gold prices higher, with 95% of surveyed banks planning to increase their gold reserves over the next year while reducing their dollar holdings. This shift reflects rising concerns over U.S. fiscal policy and political stability as nations seek alternatives to dollar-denominated assets.

Silver has mirrored gold’s rise, reaching $40.80 per ounce, its highest level in 14 years, while gold mining stocks have outperformed broader markets. Harmony Gold rose 5.6% and Newmont gained 1.1%.

As trade tensions, monetary policy debates, and September’s seasonal market weakness converge, investors are increasingly turning to gold as a shield against financial turbulence.