Gold Surges Past $2,900 as Trump’s Tariff Threats Drive Safe-Haven Demand

Gold prices have shattered records, surpassing the critical $2,900 per ounce threshold for the first time as investors flock to safe-haven assets amid escalating trade war concerns and heightened inflation fears. The surge follows U.S. President Donald Trump’s renewed tariff threats, which have intensified economic uncertainty.

As of 1:45 p.m. ET (1845 GMT), spot gold jumped 1.6% to $2,905.24 per ounce, reaching an all-time high of $2,911.30 earlier in the session. U.S. gold futures also closed 1.6% higher at $2,934.40.

Tariffs and Inflation Fears Drive Gold’s Ascent

Marex analyst Edward Meir attributes gold’s rapid ascent to heightened geopolitical risks, noting that “the tariff war is the primary driver, reflecting growing economic tension and market uncertainty.”

On Sunday, President Trump announced plans to impose an additional 25% tariff on all steel and aluminum imports. He also vowed to introduce reciprocal tariffs, aligning U.S. trade policies with those of competing nations.

These tariff hikes have raised alarm over potential inflationary pressures, making this week’s U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data crucial indicators for investors. A weaker-than-expected CPI and PPI could pressure the U.S. dollar and further lift gold prices, while stronger inflation data may lead to rising U.S. Treasury yields, potentially dampening gold’s momentum.

Federal Reserve and Market Reactions

All eyes are also on Federal Reserve Chair Jerome Powell, who is set to testify before Congress on Tuesday and Wednesday. His remarks could influence interest rate expectations and impact gold’s trajectory.

Despite the potential for fluctuations, gold has now marked its seventh record high in 2025, reinforcing its role as a hedge against economic uncertainty, high inflation, and currency devaluation.

According to Phillip Streible, chief market strategist at Blue Line Futures, gold’s upward momentum since December 2024 could fuel further gains. Streible suggests that if bullish trends persist, gold could surge toward $3,250 or even $3,500 per ounce in the coming months.

Silver Also Climbs Amid Market Volatility

The rally in precious metals isn’t limited to gold—silver prices have also gained traction. Spot silver climbed 0.8% to $32.05 per ounce, hitting a three-month high on Friday. With ongoing economic instability, silver may continue to follow gold’s bullish trend.

Market Outlook: Will Gold Maintain Its Upward Momentum?

With continued macroeconomic uncertainty, persistent inflation concerns, and looming trade conflicts, analysts predict that gold demand will remain strong. Investors seeking wealth protection are expected to maintain their bullish stance on physical gold and gold-backed investment vehicles.

As 2025 unfolds, the gold market remains a focal point for investors navigating turbulent financial landscapes.

Source: Reuters
Written by: Anmol Choubey, Reuters