Gold Prices Soar as Trump’s Tariff Policies Shake Global Markets

Why Gold is the Ultimate Safe Haven in a Trade War

Gold has emerged as the top-performing asset in recent weeks, outshining stocks, the dollar, and even Bitcoin. Since the inauguration of US President Donald Trump, concerns over a trade war and economic uncertainty have driven gold prices to record highs.

As of this week, gold has hit a new peak of $2,942.70 per troy ounce, marking a nearly 7% increase since January 20. In contrast, the S&P 500 has risen by less than 2%, and traditional pro-Trump trades, such as bets on a stronger dollar and higher Treasury yields, have struggled.

How Trump's Tariffs Are Fueling the Gold Rush

President Trump’s aggressive trade policies, including new tariffs on China and reciprocal tariffs on allies and adversaries, are rattling global markets. Analysts warn that a full-blown trade war could slow economic growth and fuel inflation—two factors that typically send investors rushing to gold.

James Steel, a precious metals analyst at HSBC, explains: “When trade contracts, gold takes off. The more tariffs imposed, the more it disrupts world trade, and the better it is for gold.”

Investors Move Gold from London to New York

The surge in gold prices has been amplified by a 116% increase in stockpiles in New York as traders and banks shift physical gold from London’s vaults to the US. This shift has even created a backlog at the Bank of England, where gold withdrawals now face weeks-long delays.

Other Markets Struggle Amid Tariff Tensions

While gold continues its rally, other assets tied to Trump’s economic policies have suffered:

• The US dollar has slipped 2.4% this year against a basket of currencies, reversing previous gains.
• US Treasury yields peaked at 4.8% last month but have since dropped to 4.48%, as investors flock to safer government bonds.
• Global markets have responded cautiously, with investors weighing the risks of a prolonged trade war.

Nicky Shiels, an analyst at gold refiner MKS Pamp, highlights the direct link between tariffs and gold prices: “There is a positive correlation between tariff headlines and rising gold prices.”

Central Banks and Investors Fuel the Gold Rally

A major driver of gold’s strength is continued demand from central banks, which have been buying gold to diversify away from the US dollar. Last year alone, central banks purchased more than 1,000 tonnes of gold—a trend expected to continue in 2025.

Mark Bristow, CEO of Barrick Gold, sums up investor sentiment: “The chaos across the globe has made gold the ultimate reserve currency. Unlike fiat money, politicians can’t print more gold.”

What’s Next? Gold Could Hit $3,000 Soon

With mounting global uncertainty, top banks like UBS and Citigroup have already upgraded their gold price forecast to $3,000 per ounce. As long as trade tensions remain high and economic uncertainty lingers, gold is likely to remain the go-to safe haven for investors worldwide.

Conclusion: Is Gold the Best Investment Right Now?

Gold’s impressive rally in 2025 underscores its status as the ultimate hedge against economic turmoil. With ongoing trade wars, a weakening dollar, and strong central bank demand, all signs point to continued price gains. For investors seeking stability in volatile times, gold remains a smart bet.

Sources: (FT.com, ChatGPT)