Assets

Gold Soars to $3,000 as Trump's Tariffs Rattle Markets

Ken Metral

14 Mar 2025 — 2 min read

Gold surged to a historic milestone on Friday, breaking above $3,000 an ounce for the first time ever as rising geopolitical tensions and President Donald Trump’s escalating trade war drive investors toward safe-haven assets.

At 6:30 a.m. ET, spot gold was up 0.4%, trading at just over $3,001 a troy ounce, capping off a dramatic rise of 15% year-to-date. The rally reflects growing fears of an economic slowdown amid widespread tariff threats and increasing global instability.

Trade War Sparks Safe-Haven Surge

The catalyst behind the latest spike? A fresh wave of tariff threats. On Thursday, Trump proposed a 200% tariff on European alcohol imports, retaliating against newly imposed EU tariffs. The European Union acted after the U.S. slapped 25% tariffs on all steel and aluminum imports, which took effect Wednesday.

“Markets are fixated on the fallout of broad tariffs that the Trump administration has levied,” wrote the World Gold Council, noting that geopolitical risk spiked earlier this year, fueling demand for gold even amid a strong U.S. dollar — a rare dynamic that typically weighs on gold prices.

Central Banks Keep Buying — Especially China

Another major force pushing gold higher: central bank demand. According to the World Gold Council, this trend shows no signs of slowing, with China leading the charge. Analysts expect sustained buying in 2024 as countries diversify reserves away from currencies and into tangible assets like gold.

“Central banks are still buying and will probably continue to do so as geopolitical tensions and the economic climate continue to push them to increase their allocation towards safe-haven assets,” said Ewa Manthey, commodities strategist at ING.

Last year, Poland’s central bank led the pack, purchasing 90 metric tons of gold. The U.S. remains the largest holder, with over 8,000 tons.

Could Gold Itself Face Tariffs?

Adding to the uncertainty, there’s growing concern that gold imports could become subject to tariffs as well.

“If tariffs on gold are applied, this would lead to higher and more volatile gold prices in the US and a potential reshuffle of trade routes,” Manthey noted.

Currently, Mexico supplies about 30% of U.S. gold imports, followed by Canada at 15%. Any disruption to these flows could further strain supply and fuel price volatility.

The Takeaway

Gold’s climb past $3,000 is a clear reflection of today’s uncertain global landscape — marked by trade conflicts, geopolitical instability, and inflation fears. With central banks still buying and investors rushing to safety, the yellow metal’s momentum shows no signs of slowing down.

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