Gold prices surged to new all-time highs on Wednesday, driven by the continued decline of the U.S. dollar and escalating tariff tensions between the U.S. and China. The global demand for gold as a safe-haven asset intensified, with investors seeking refuge amidst economic uncertainty and geopolitical risks.
As of 5:40 a.m. GMT on Wednesday, gold prices were hovering around $2,285 per ounce, marking a 1.91% daily gain. Year-to-date, gold has seen an impressive increase of over 25%, or $630, reflecting heightened investor concern over global trade dynamics and economic slowdowns.
The rising demand for gold was further fueled by Nvidia’s warning of potential losses exceeding $5.5 billion, which signaled a possible contraction in the global technology sector—an industry that plays a crucial role in driving economic growth in both Asia and the U.S. The news added to growing fears that the U.S.-China trade dispute could significantly impact key sectors of the global economy.
Tariff Uncertainty and Dollar Weakness Support Gold Demand
Gold’s upward momentum comes amid continued safe-haven demand as investors react to the uncertainty surrounding U.S. President Donald Trump’s tariff policies. The trade conflict between the U.S. and China has been a source of volatility since Trump’s election and has escalated since he took office. On April 2, the U.S. unveiled reciprocal tariffs, imposing additional levies of between 10% and 50% on imports from 185 countries, based on each nation’s trade deficit with the U.S.
In response, China has retaliated with its own counter-tariff hikes, increasing the pressure on global trade relations. Trump delayed tariffs exceeding 10% for 90 days on the affected countries but continued to respond aggressively to China’s countermeasures. As a result, tariffs on Chinese goods have soared to as high as 145%, while China imposed tariffs of 125% on U.S. imports. This ongoing tit-for-tat tariff exchange has intensified market fears, pushing more investors toward gold and other safe-haven assets.
Gold Price Forecasts Raised by Leading Investment Banks
Given the growing geopolitical and economic risks, several prominent international investment banks have revised their gold price projections for the year. ANZ Bank, based in Australia, has raised its year-end gold price target to $3,600 per ounce, with a six-month projection of $3,500, citing a surge in central bank demand for gold as investors flock to safe-haven assets.
Goldman Sachs also revised its outlook on Monday, increasing its 2025 year-end gold price forecast from $3,300 to $3,700 per ounce, with a trading range of $3,650–$3,950. Meanwhile, UBS, the Swiss banking giant, has also lifted its 2025 forecast for gold, raising its target from $3,200 to $3,500 per ounce.
Euro Strengthens as U.S. Dollar Weakens
In addition to gold, the euro has gained strength against the U.S. dollar, further driving investor shifts away from the dollar. The U.S. dollar index fell below the 100 mark, hovering around 99.5, as the uncertainty surrounding Trump’s tariff plans continued to exert downward pressure on the currency. The euro/U.S. dollar exchange rate rose 0.78%, reaching 1.1368, with year-to-date gains approaching 10%.
The euro’s strength can be attributed not only to safe-haven flows but also to the growing geopolitical uncertainty surrounding U.S. trade policies. The European Union’s more stable trade posture and multilateral approach amid the U.S.-China tensions have made the euro more appealing to investors seeking refuge from market volatility. As the second-largest reserve currency in the world, the euro has benefitted from its role as a geopolitical counterweight to the dollar.
With increasing geopolitical and economic uncertainties, market participants are likely to continue seeking shelter in both gold and the euro. As tariffs and trade policies remain in flux, investors are closely monitoring these developments, which are expected to influence the future direction of gold and currency markets.
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