Gold Reaches $3,000 Amid Escalating Global Trade War and Economic Uncertainty

The price of gold has surged to an all-time high of $3,004.86 per ounce as of Friday, marking a 14% increase since the beginning of 2025. This surge is attributed to rising demand for gold as a safe haven for investors amid growing economic uncertainty fueled by a global trade war. The escalating tensions between the US and several trading partners have unsettled financial markets, leading to fears of inflation due to newly imposed tariffs. President Trump recently threatened a staggering 200% tariff on alcohol imports from the EU in response to retaliatory measures against US whiskey. This creates a ripple effect of increasing costs that could impact consumers significantly.

Precious metals analyst Suki Cooper highlighted that geopolitical instability and tariffs are driving a robust appetite for gold. Victoria Hasler from Hargreaves Lansdown noted that high levels of uncertainty, driven by both political tensions and social media rhetoric, are causing markets to react negatively, increasing the demand for gold. In addition, there’s been notable activity from central banks, which have been accumulating gold to diversify their reserves away from US dollars, according to commentary by Hasler.

As history has shown, major spikes in gold prices often coincide with economic crises, and the current scenario is no exception. Investment director Russ Mould from AJ Bell pointed out that central banks have been stockpiling gold for three consecutive years, adding over 1,000 tonnes last year alone, indicating a trend towards valuing gold as a stabilizing asset in uncertain times. Mould also elaborated on how the Covid-19 pandemic and rising government deficits are propelling investor interest in gold, marking a significant resurgence in its appeal as a secure investment.