Are Investors Betting on Gold as Liquidity Risks Grow?
- Gold breaks above $4,600 as Trump-driven uncertainty fuels safe-haven demand worldwide.
- Powell probe heightens rate and liquidity fears, pushing investors deeper into gold trades.
- Australia benefits as gold lifts exports, taxes, and RBA reserves, reviving old sale focus.
Gold is surging as policy uncertainty spikes in the United States. Investor risk appetite has weakened as President Donald Trump’s actions generate fresh volatility. This week, the gold price pushed above $4,600 per ounce for the first time ever. That breakout signals rising demand for safety as global markets brace for unstable headlines.
According to a report, political risk climbed after a wave of aggressive signals from Trump this month. A military incursion into Venezuela and the capture of its leader were ordered, according to the text. Readiness to “take” Greenland was also announced publicly. Warnings were issued toward Cuba, Colombia, and Mexico as well.
Gold Jumps as Powell Probe Fuels Rate And Liquidity Fears
Domestic uncertainty deepened after Trump directed the Justice Department to investigate Federal Reserve Chair Jerome Powell. Tension around monetary policy often hits markets fast because it impacts rates and liquidity. Reports also described Trump appearing to fall asleep during meetings.
Uncertainty remains the key market driver in this environment. Traders struggle to price risk when policy direction changes without clear rules. Even though economic policy uncertainty has eased since last year’s tariff chaos, the level remains far above normal. It is still about three times higher than when Trump won the election in November 2024, based on the provided text.
Momentum has been extreme compared with past crisis cycles. The metal is up roughly 73% versus levels seen when Trump took office 14 months ago. That climb has been faster than during the COVID-era panic.
Historical comparisons show few rivals to the speed of this run. Post-9/11 moves were slower than the current rally, according to the same source material. The only faster rises were linked to the 1973 OPEC crisis and the 1979 oil shock after the Iranian revolution.
Crypto traders recognize the same mechanics in their own markets. Sudden risk events usually force capital into safety trades. In digital assets, that could mean stablecoins or Bitcoin dominance spikes. In traditional finance, gold still carries the most established crisis hedge reputation.
Related: Venezuela Turns to USDT as Stablecoins Bypass Sanctions
Australia is benefiting indirectly from the rally. The country is the third-largest gold producer globally. Rising bullion prices increase the value of its gold exports. Stronger export numbers could lift national income and improve trade performance.
Gold Boosts Australia’s Taxes and RBA Reserves as Old Sale Draws Scrutiny
Tax receipts are rising alongside mining profits. Gold firms generate higher margins when the price climbs this aggressively. Australia’s mid-year economic and fiscal outlook noted the change. Corporate tax revenue was lifted by $4.3 billion for 2025–26, driven partly by higher bulk commodity and gold prices.
Direct gains are also appearing on the central bank balance sheet. The Reserve Bank of Australia holds around 80 tonnes of gold. Appreciation increases the value of reserve assets. Such gains strengthen headline reserve numbers even without any new purchases.
Reserve valuation has already jumped sharply. RBA gold assets rose from $9.6 billion in December 2024 to $15.7 billion last month. That marks a 64% increase. A record-high valuation is now on the books.
Long-term strategy is also back in focus due to the rally. In 1997, the RBA sold about two-thirds of its gold holdings. A total of 167 tonnes was sold from the 250 tonnes it held. Treasurer Peter Costello supported the move at the time.
Arguments for the sale centered on weak gold performance and a global trend of central bank selling. Costello said reinvested proceeds should yield higher annual profits than holding bullion. Short-term market cycles made the decision look smart for a while.
Gold’s record push reflects how global capital reacts when narratives turn unstable. Risk assets thrive on predictable policy and clear signals. Safe havens win when uncertainty dominates. That pattern now looks active again, and gold is taking the lead even as crypto continues to grow as a competing hedge.
