Gold prices have reached a fresh record high, with spot gold hitting $3,357.40 (£2,540) per ounce on Wednesday, before slightly dipping from its peak. The precious metal has surged by approximately 30% since the beginning of 2025, as investors seek refuge amid growing concerns over the escalating trade conflict between the U.S. and China.
The latest surge in gold prices follows remarks by Federal Reserve Chair Jerome Powell, who warned that President Donald Trump’s tariff policies could lead to slower economic growth and higher prices for consumers. Speaking at the Economic Club of Chicago, Powell indicated that the new tariffs, which have exceeded expectations, are likely to hurt the U.S. economy by slowing growth and driving up inflation.
Gold is widely considered a safe haven asset during times of economic uncertainty, and its recent rise reflects increasing investor fears about the broader impact of the U.S.-China trade war. The global financial markets have been shaken by the introduction of new import taxes and the continued escalation of the trade conflict, with gold becoming the go-to asset for those seeking stability.
Stephen Innes, a strategist at SPI Asset Management, described the current gold market as being in “full lifeboat mode,” referring to the precious metal’s status as the “most crowded trade on the planet.” Innes also noted that the U.S. dollar is struggling due to the effects of the trade war, and portfolio managers have lost confidence in assets influenced by political decisions.
The rally in gold prices this year has drawn comparisons to the gold surge during the Iranian Revolution in the late 1970s, when prices skyrocketed by nearly 120% from November 1979 to January 1980. Gold crossed the $3,000-per-ounce mark for the first time last month, driven by uncertainty surrounding the impact of the ongoing trade conflict.
Jesper Koll, from the advisory firm Monex Group, said that investors are flocking to gold as a “trust hedge” against inflation and government policies that seem unpredictable. He pointed out that there is a growing demand for “real” assets, particularly as the Trump administration’s “move fast and break things” approach to policy making continues to fuel uncertainty.
The tariffs imposed by the Trump administration on imports from overseas have stoked fears of rising inflation, prompting many investors to turn to gold and other safe-haven assets. Since taking office in January, President Trump has imposed a 145% tariff on Chinese goods, with China responding with a 125% tariff on U.S. imports. There is also uncertainty surrounding the implementation of additional tariffs on other countries, which have been temporarily paused for 90 days.
The Trump administration has defended these measures, arguing that the tariffs will bring manufacturing jobs back to the U.S., generate billions of dollars in tax revenues, and reduce the trade deficit. However, the ongoing volatility in global markets suggests that many investors remain skeptical of the administration’s policies and are increasingly seeking the stability that gold offers.
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