Gold prices have surged to a new record high as investors seek safer assets amid growing concerns about the impact of the ongoing US-China trade war. On Wednesday, spot gold briefly reached $3,357.40 per ounce before pulling back slightly. This marks a nearly 33% increase in value since the start of 2025.
The price spike follows remarks by Federal Reserve Chairman Jerome Powell, who warned that the trade tensions, exacerbated by President Donald Trump’s tariffs, could lead to slower US economic growth, higher consumer prices, and rising unemployment risks. Powell’s comments came after significant market turbulence triggered by the latest round of tariffs, with investors flocking to gold as a hedge against inflation and economic uncertainty.
Gold is viewed as a “safe haven” asset in times of economic instability, and analysts have drawn comparisons between this year’s rally and the massive price jump seen during the Iranian Revolution in 1979. The Trump administration’s 145% tariff on Chinese imports, coupled with China’s retaliatory 125% tariff on US goods, has fueled inflation concerns, leading investors to seek stability in tangible assets like gold.
In addition to tariffs, there is growing uncertainty about whether other US tariffs on additional countries will go into effect, which could further destabilize markets. Despite these concerns, Trump’s administration maintains that the tariffs are necessary to bring manufacturing back to the US and boost American jobs and tax revenues.
The rapid rise in gold prices reflects a broader sentiment of fear and mistrust in financial markets, as political decisions and trade wars continue to shape the global economy. As the trade conflict escalates, gold’s status as a trusted asset continues to grow, making it one of the most popular investments in the current climate.
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