The pound climbed to its highest level in seven months on Tuesday and gold prices surged to a record high above $3,500 per ounce, as investors dumped equities in favour of traditional safe-haven assets amid deepening fears over US political interference in monetary policy.
Sterling briefly broke above $1.34 against the dollar — its highest since September — before easing to $1.338. Against the euro, the pound gained 0.12 per cent to reach €1.163, on track for its longest winning streak against the US currency since 1971.
The market reaction came in response to a renewed barrage of criticism from President Donald Trump, who labelled Federal Reserve chairman Jerome Powell “a major loser” and demanded interest rate cuts, warning of a looming economic slowdown unless his calls were heeded.
Gold rallied sharply on investor jitters, climbing to a new high above $3,500 before settling at $3,469.13 per troy ounce in morning trading in London. Analysts cited growing concerns about the Federal Reserve’s independence as the key driver of the rush into gold.
“The broad sell-off was triggered by rising concerns over Fed independence,” analysts at Deutsche Bank said. “Yesterday’s market moves were the clearest sign yet of investor anxiety over the topic.”
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