Gold hits key $3,500 mark as Trump's attacks on Fed chief rattle traders

Spot gold was up 2.2% at $3,493.41 an ounce, as of 0620 GMT, after touching a record high of $3,500.05 per ounce earlier in the session.

Gold prices soared to a record high, hitting the crucial $3,500 mark on Tuesday, as concerns over U.S. President Donald Trump's criticism of Federal Reserve Chair Jerome Powell dampened risk sentiment and drove investors towards safe-haven bullion.

Spot gold was up 2.2% at $3,493.41 an ounce, as of 0620 GMT, after touching a record high of $3,500.05 per ounce earlier in the session.

U.S. gold futures firmed 2.3% to $3,502.40.

"Investors have been giving a wide berth to U.S. assets amid tariff worries and Trump-Powell dramas, which has kept gold in prime position to capitalise on the dollar's woes," said Tim Waterer, chief market analyst at KCM Trade.

Trump reiterated his call for an immediate reduction in interest rates on Monday, warning that the U.S. economy could face a slowdown, while criticizing Powell's stance to keep rates unchanged until clarity on the inflation impact of Trump's tariff plans.

Asian stock markets struggled to maintain stability following a rapid sell-off of U.S. assets that weakened Wall Street and the dollar. [MKTS/GLOB][USD/]

On Monday, China accused Washington of abusing tariffs and warned countries against striking a broader economic deal with the U.S. at its expense.

"There remains a chance of a pullback given the rapid rate of gains on display so far this month. But there is reason to believe that buyers will be keen on gold should a pullback occur given that high economic uncertainty remains a prevailing market theme," Waterer said.

Gold, viewed as a safe-haven asset amid economic uncertainties, has risen nearly 33% so far this year.

However, gold's relative strength index (RSI) stands at 79, indicating that the metal is overbought.

Markets are eagerly anticipating speeches from several Fed officials later this week, hoping for insights into future monetary policy amid concerns about central bank's independence.

Spot silver rose 0.3% to $32.80 an ounce, platinum gained 1.1% to $972.20, while palladium was up 2.2% at $948.14.