Spot gold reached a peak of £2,540 around 2am GMT before settling slightly lower. The spot price for gold at time of writing is around £2,515.

The rally was primarily fuelled by a weakening US dollar and escalating trade tensions between the United States and China. Investors sought the security of gold as a safe-haven asset amidst wider financial market uncertainty. US President Donald Trump’s directive to investigate potential tariffs on critical mineral imports further strained US-China relations.

The US dollar lingered near a three-year low against its rivals, making dollar-denominated gold more attractive to holders of other currencies.

Analysts noted that while gold remains strongly supported by these factors, along with expectations of interest rate cuts and central bank purchasing, the rapid ascent leaves it potentially vulnerable to corrections if trade developments turn positive or profit-taking occurs. Potential psychological targets of $3,400 (c. £2,568) and $3,500 (c. £2,644) were mentioned.

Concerns about slowing US economic growth, highlighted by Federal Reserve Chair Jerome Powell, also contributed to the metal’s appeal. Gold has appreciated by nearly $700 (c. £530) so far this year.