Gold Price Soars to $3,000 Amid Rising Trade Tensions.
The price of gold has soared to an all-time high of $3,000 per ounce, touching a record $3,004.86 on Friday. This significant rise, which represents a 14% increase since the beginning of 2025, reflects the surging demand for the precious metal amid escalating global economic uncertainty. Gold is widely regarded as a safe-haven asset, particularly sought after during times of financial instability.
The growing trade war between the US and several of its largest trading partners has stirred financial markets and raised concerns about the broader impact on economies and consumers worldwide. The imposition of tariffs—taxes placed on imported goods—has fueled fears of rising inflation, which has driven investors to Gold as a hedge against these potential price increases.
Tariffs add extra costs for businesses importing goods, and these costs often get passed on to consumers through higher prices, contributing to an increased cost of living. On Thursday, US President Donald Trump threatened a 200% tariff on alcohol imports from the European Union (EU), marking the latest escalation in the trade war. This announcement was a response to the EU’s plans to impose a 50% tax on US-produced whiskey, as part of the EU’s retaliation to Trump’s blanket tariffs on steel and aluminum imports from any country. Additionally, the US president has raised tariffs on Chinese imports to at least 20%.
"In a backdrop of geopolitical uncertainty and ongoing tariff changes, appetite for gold remains strong," said Suki Cooper, a precious metals analyst at Standard Chartered.
Victoria Hasler, head of fund research at Hargreaves Lansdown, identified two primary factors driving gold’s price surge.
"Between Trump's tariffs and social media comments and the ongoing tensions in both the Middle East and Russia/Ukraine, uncertainty is high and seems to be rising," she said. "Markets hate uncertainty. This dynamic has helped to drive the gold price to new highs."
The second significant factor is central banks’ increasing gold purchases, although the precise reasons behind this trend remain unclear. "It's probably safe to assume that at least part of the reason is a desire to diversify reserves away from US dollars," Hasler explained. "Both of the above drivers remain intact, and I can't see them diminishing in the near future."
Gold has historically responded to economic upheaval, with its price rising during moments of crisis. For example, during the global financial crisis of 2007, investors flocked to gold as a haven asset, contributing to a price increase.
Russ Mould, investment director at AJ Bell, referred to World Gold Council data showing that central banks added 1,045 tonnes of gold to their reserves last year, marking the third consecutive year that more than 1,000 tonnes were purchased. "We are in an era in which gold is really starting to shine," he said.
Credit: Olivier Le Moal on Istock.
Since dipping below $1,200 an ounce in late 2018, gold prices have "marched inexorably higher," driven by factors such as the Covid pandemic and rising government deficits, which have encouraged investors to "warm to gold once more." Mould added, "Quite which of these issues is now the main driver of gold's renaissance is hard to divine, especially as Donald Trump's tariffs are prompting a debate about how inflationary (or stagflationary) they may prove to be, and how effective they may be at funding the new US President's hoped-for tax cuts."
In conclusion, gold continues to demonstrate its reliability as a valuable asset in times of uncertainty. Amid geopolitical tensions, economic instability, and ongoing inflation fears, the precious metal stands strong as a safeguard for investors. Central banks’ continued interest in gold further underscores its enduring value. With its proven track record as a safe-haven asset, gold is likely to remain a wise investment choice in the face of global challenges.
