The gold market is booming as investors seek a safe haven for their investments amid global economic uncertainty.

The price of gold has risen by nearly a third over the past year, surpassing $3,550 per ounce on Wednesday to hit an all-time high.

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Some analysts expect prices to keep climbing amid a tumultuous geopolitical environment.

Why is gold so popular right now?

Gold has long been favoured by investors during periods of uncertainty or upheaval because its value is considered relatively stable, especially compared with stocks, said Tim Waterer, chief market analyst at KCM Trade in Australia.

“The one thing financial markets hate is uncertainty, and in such scenarios, gold is usually the go-to asset for traders,” Waterer told Al Jazeera.

While gold has historically produced only modest returns, its price has risen sharply over the past two years amid a tumultuous international environment beset by the wars in Ukraine and Gaza and United States President Donald Trump’s trade war.

Gold is also favoured by investors who are distrustful of governments and financial institutions because it is a commodity that can be physically owned and stored.

How are investors buying gold?

There are two main methods of trading gold.

The first is through the purchase of bullion in the form of bars, ingots, jewellery, or coins.

The second option is to trade financial products.

Investors buy and sell gold futures – contracts to buy or sell gold at a certain price – and exchange-traded funds that track gold’s price.

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While bullion may be straightforward for individuals to purchase, financial products offer institutions the benefit of not having to physically handle or store large quantities of the metal.

Gold is typically denominated in US dollars, and its value has an inverse relationship with the currency.

If the dollar falls, the price of gold usually rises and vice versa.

How is Trump driving up the price of gold?

The price of gold surged in April when Trump unveiled his “Liberation Day” tariffs on much of the world, setting off a period of major uncertainty about the future of global trade.

Trump’s ongoing attacks on the independence of the US Federal Reserve, which has long been viewed as above politics, have helped drive prices higher more recently.

Trump has repeatedly pressured the central bank to cut interest rates to stimulate economic growth and expressed his wish for the value of the dollar to fall to make US exports cheaper.

Either scenario makes gold more attractive to investors, said Kyle Rodda, a senior financial market analyst at Capital.com.

“If interest rates rise, gold becomes less appealing because I can get more for my money by parking it in an interest-bearing asset, like a bank account,” Rodda told Al Jazeera.

“However, if interest rates fall, I get less interest paid to me, making gold relatively more attractive to hold.”

The same is true for other interest-bearing assets, such as bonds.

Foreign investors trading in currencies other than the dollar may also look to buy more gold as the US currency falls, since they will get more value for their money, Rodda said.

What’s happening outside the US?

Economic jitters elsewhere have also bolstered the case for gold.

The British sterling and the Japanese yen have slumped in recent days amid concerns over the worsening state of the public finances in the United Kingdom and Japan.

The yen has also been hit by instability in Japan’s governing party.

“When your currency is losing value, gold is seen as a good asset to protect against inflation risks because, unlike currencies, gold’s supply is more finite in nature and is therefore less prone to price dilution. It is true for other countries too, such as Turkey and Egypt,” Waterer said.

Gold is also an increasingly popular option for foreign governments that need to store large quantities of US dollars generated from trade, but have less confidence in government bonds under Trump, said Rodda.

“Generally, a country will use these dollars to buy Treasuries to park the money somewhere safe and earn an interest rate on it,” Rodda said.

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“President Trump’s trade policy has reduced confidence in holding US assets, especially amongst its strategic adversaries. As a result, those countries holding lots of dollars are using them to buy gold instead as a store of value, pushing up the gold price.”