Gold hits $3,500 per ounce as investors flock to safety

Gold extended its record run on Tuesday, breaching $3,500 per ounce, as weakness in the dollar, US President Donald Trump's attacks on the Federal Reserve and trade war fears boosted demand for the safe-haven asset.

Spot gold was up 0.5% at $3,440.51 an ounce by 09:21am EDT (1321 GMT), after rising as much as 2.2% to $3,500.05 earlier in the session. US gold futures climbed 0.9% to $3,454.60.

"Gold is continuing to find buyers on any short-term dips, and it is really difficult to say how much further it can go. Momentum is clearly strong, which is discouraging investors or traders from selling gold significantly," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

"The primary driver of gold is undoubtedly ongoing trade tensions. The standoff between the US and China has created the kind of economic fog that keeps risk assets on edge and gold bulls firmly in control."

Gold, often used as a safe store of value during times of political and financial uncertainty, has risen more than 30% so far this year, owing to central bank buying and escalating trade tension between the US and China.

Adding to tensions in the market, Trump ramped up his criticism of Fed chief Jerome Powell on Monday and demanded to cut interest rates, which rattled financial markets and sent the dollar lower.

"I think the uncertainty with respect to tariffs is the main catalyst for currency depreciation pressures in Asia, which is ultimately one of the main fundamental drivers for gold buying activity," said Daniel Ghali, commodity strategist at TD Securities.

Traders will look to speeches by several Fed officials later this week, hoping for insights into future monetary policy amid the concerns about the central bank's independence.

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

Spot silver rose 0.3% at $32.63 an ounce, platinum was steady at $962.36, and palladium jumped 1.4% to $940.