Gold nears $3,100 as buyers run for canopy from Trump tariffs

Gold prices have hit yet another record high as President Donald Trump’s trade wars drive investors to the safe haven asset.

Spot gold prices reached $3,084.4 per ounce on Friday morning, according to the World Gold Council, meaning they have increased by about 17 per cent in 2025 and about half since January last year.

Analysts have widely credited the latest extension to a long gold rally to economic unpredictability caused by Trump introducing new tariffs to try and reduce the US trade deficit and encourage more domestic manufacturing.

Since returning to office in January, the US Government has imposed a 25 per cent tax on steel and aluminium imports and doubled the tariff on Chinese goods to 20 per cent.

It has also partially implemented 25 per cent tariffs on Mexican and Chinese products and intends to slap a similar amount on imported cars and automotive parts from 3 April.

Canada has responded with retaliatory tariffs on £84billion of American goods, while the European Union announced £22billion of ‘countermeasures’.

Surging: Gold has hit a new record high price as US President Donald Trump’s trade wars drive investors to the safe haven asset 

The various tariffs have heightened concerns of higher inflation, delayed interest rate cuts, and weaker global economic growth.

As a result, more people have invested in gold, which is traditionally perceived as a hedge against elevated uncertainty.

Gold prices have also been lifted by inflows into gold-backed exchange-traded funds, as well as significant demand from central banks since Russia’s full-scale invasion of Ukraine three years ago.

Central banks added 1,045 metric tons to their reserves in 2024, led by institutions in emerging markets such as Poland, India and China.

It was the third successive year gold purchases by central banks have surpassed 1,000 tonnes.

In a report earlier this week, Goldman Sachs cited ETF inflows and continued central bank demand for raising its gold price forecast. The banking giant now predicts gold will end the year at $3,300 per ounce.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes the gold price could further rise are likely if current conflicts in Europe and Asia do not calm down.

She said: ‘While further steps towards a ceasefire in Ukraine could see prices ease off, violence continues in the Middle East.

‘There is also a risk that geo-political tensions escalate as opportunities in the Arctic are eyed by the US and Russia.

‘If there are any indications that China may be poised to become more aggressive against Taiwan, there could be a further pull towards the precious metal.’