Gold Price Surges in 2025: Trump’s Trade Wars Drive Uncertainty

The price of gold has been on a remarkable upward trajectory this year, defying expectations and outperforming other major commodities. With a year-to-date increase of over 14%, gold continues to shine as a safe-haven asset in uncertain times.

US President Donald Trump’s unpredictable trade policy has been a major catalyst for the surge in gold prices. The back and forth on tariffs has created volatility and uncertainty, prompting investors to seek refuge in the precious metal.

Recent threats of imposing steep tariffs on European products like wine and champagne, coupled with retaliatory measures from the EU and Canada, have further fueled the flight to safety. As trade tensions escalate, the demand for gold as a safe-haven asset is expected to grow.

Central banks around the world are also ramping up their gold purchases, with emerging market central banks leading the charge. China, Uzbekistan, and Kazakhstan are among the top buyers, increasing their gold reserves despite record high prices.

The surge in central bank purchases can be attributed to geopolitical uncertainties, concerns about sanctions, and shifting strategies on currency reserves. Last year, central banks collectively bought over 1,000 tonnes of gold, indicating a growing appetite for the precious metal.

ETF inflows have also been on the rise, reaching the highest level since October 2023. The increase in gold exchange-trade fund holdings signals continued investor interest in the metal, especially during times of economic uncertainty.

With ongoing trade tensions, central bank buying, and strong ETF inflows, the rally in gold prices is expected to persist. Investors should keep an eye on these factors as they navigate their investment strategies in the current market environment.