Michelle ThompsonGold prices have reached a record $3,000 per ounce for the first time, driven by a surge in demand as economic uncertainty grows due to the ongoing global trade war.
On Friday, gold touched $3,004.86 per ounce, marking a 14% increase since the beginning of 2025. As a traditionally safer investment, gold is highly sought after during periods of economic instability.
The intensifying trade war between the U.S. and its major trading partners has unsettled global financial markets, raising concerns about its impact on economies and consumers. The imposition of tariffs—taxes on imported goods—has stoked fears of price inflation, prompting many investors to turn to gold. As businesses face higher costs from tariffs, these additional expenses may be passed on to consumers, increasing the cost of living.
On Thursday, U.S. President Donald Trump threatened a 200% tariff on any alcohol imported from the European Union, escalating the trade war further. This threat followed the EU’s plan to impose a 50% tax on U.S. whiskey imports in retaliation to Trump’s tariffs on steel and aluminum from all countries.
Trump has also increased tariffs on Chinese imports to at least 20%. Suki Cooper, a precious metals analyst at Standard Chartered, noted that geopolitical uncertainty and tariff changes continue to drive strong demand for gold.
Victoria Hasler, head of fund research at Hargreaves Lansdown, identified two primary factors behind the current surge in gold prices: the high level of uncertainty from ongoing trade tensions and geopolitical issues, and central banks’ increased purchases of gold. While the reasons behind the central bank buying spree are unclear, Hasler suggested it might be a strategy to diversify reserves away from U.S. dollars.
Gold prices have historically risen during major economic events, such as the global financial crisis in 2007 when investors sought the metal as a safe haven. According to Russ Mould, investment director at AJ Bell, central banks added over 1,000 tonnes of gold to their reserves for the third consecutive year in 2024. He described this period as one where gold is “really starting to shine.”
Since gold prices fell below $1,200 per ounce in late 2018, they have steadily risen, driven by factors like the Covid pandemic and increasing government deficits. Mould noted that the exact reason for gold’s current rise is difficult to pinpoint, but factors like Trump’s tariffs and their potential inflationary effects, as well as debates around tax cuts, are contributing to the trend.
