Investors Rush to Gold as Trump’s Tariff Plans Spark Market Fears

Gold prices hit record highs as investors look for safer places to put their money

Investors are piling into gold funds at the fastest rate since the Covid-19 pandemic, as growing concern over Donald Trump’s upcoming tariffs triggers fears of a global economic slowdown.

Gold Prices Reach Record High

Gold surged to a record $3,148.88 per ounce on Tuesday, before dipping slightly to $3,114. The precious metal is now up 17% this year, marking its strongest first quarter since 1986.

This surge comes ahead of Trump’s planned tariff announcement, which he has named “Liberation Day”. Economists warn that these new trade measures could slow global growth, prompting investors to seek safer assets.

Flight to Safe Investments

Alongside gold, investors have also been buying US Treasury bonds and cash, traditional safe havens during economic uncertainty:

• Over $19.2 billion has been poured into gold-backed ETFs (exchange-traded funds) in the first quarter of 2025 — the biggest increase since the early days of the pandemic.

• US 10-year Treasury yields have dropped to 4.13%, close to this year’s lows, reflecting strong demand for government bonds.

• German Bund yields, the Eurozone’s go-to safe asset, also fell below 2.7% for the first time since early March.

“There’s a clear shift towards low-risk assets,” said Krishan Gopaul from the World Gold Council. “Uncertainty is driving demand for gold.”

Gold ETFs Gain Momentum

While central banks have been major buyers of gold in recent years, the current wave of buying is being led by private investors and fund managers. Analysts say the strong demand for gold ETFs shows how broad the move towards safe assets has become.

“The surge in ETF buying is the standout trend in recent weeks,” said Suki Cooper of Standard Chartered.

Rising concerns over inflation, stock market volatility, and slower growth are also fuelling the move into gold.

Banks Raise Gold Price Forecasts

Thanks to the recent rally, several banks have increased their gold price predictions. Macquarie now expects gold to reach $3,500 per ounce this year.

There’s also been a sharp rise in demand for physical gold bars, especially in New York, where stockpiles have hit record highs. Although shipments have slowed slightly, the trend highlights ongoing demand.

Defensive Stocks on the Rise

As markets wobble, investors are also turning to defensive stocks — companies seen as more stable during uncertain times.

• Healthcare firms like UnitedHealth and HCA Healthcare have gained over 10% in the past month.

• Meanwhile, the S&P 500 index has dropped around 5% over the same period.

“Very few assets look appealing right now,” said Pete Drewienkiewicz from Redington. “It’s not surprising people are becoming more cautious.”

In Summary

With Donald Trump’s new tariffs looming and markets on edge, investors are retreating into gold, bonds, and low-risk stocks. Whether this trend continues will depend on how global economies respond to a potentially rocky few months ahead.