TradingKey - Amid growing geopolitical concerns and escalating U.S. trade wars, gold prices have surged nearly 17% so far in 2025. Over the weekend, President Donald Trump confirmed rumors of a shift from targeted tariffs to broad-based tariffs. On Monday, the price of the safe-haven asset gold broke above $3,100 per ounce for the first time in history.
As of March 31, during the writing of this article, the international gold price (XAU/USD) was trading at $3,109.20 per ounce, up 0.84% on the day. Gold prices have now risen for four consecutive weeks, with year-to-date gains reaching 16.68%. In contrast, the S&P 500 index has fallen over 5% during the same period, while the so-called "digital gold" Bitcoin has declined more than 10%.
[2025 International Gold Price Chart, Source: TradingView]
Gold is widely considered an excellent hedge against economic and political uncertainty, historically performing well in low-interest-rate environments.
Analysts point out that the recent rise in gold prices has been driven by uncertainties surrounding Trump's tariffs, sluggish progress in geopolitical peace negotiations, continued purchases of gold by central banks, and a surge in investor demand for gold ETFs.
Recent economic data showed that the U.S. core PCE index rose more than expected, consumer confidence declined, and inflation expectations soared to a three-decade high. The probability of stagflation or even a recession in the U.S. has increased significantly.
Trump’s tariff policy has been unpredictable. Recently, he threatened to impose secondary tariffs on Russia and Iran, a tool seen as a new weapon for implementing sanctions under the Trump administration. Contrary to rumors of targeted tariffs, Trump confirmed plans for broad-based tariffs, stating he had never heard of a list of 10 or 15 countries allegedly involved.
Analysts at OCBC noted that, given rising geopolitical concerns and tariff uncertainties, gold’s appeal as both a safe-haven asset and an inflation hedge will further strengthen.
An investment advisor remarked that tariff-related issues will continue to push gold prices higher until retaliatory actions yield definitive outcomes.
