Investors tend to turn to precious metals in times of uncertainty, and thanks to Trump's tariffs and protectionist policies, there is more than enough of that at the moment. Adding to this are potentially rising inflation and geopolitical tensions, which have contributed to gold reaching record highs repeatedly. Central banks also see potential in gold, with their purchases reaching historic peaks.
Record Price
The yellow metal started the new month at a new all-time high, reaching $3,148 in Asian trading on April 1, 2025, and closing out the best quarter in nearly 40 years. However, it retreated from this level during the day. Gold had crossed the psychological $3,000 mark just a few weeks earlier, on March 17, 2025, having gained 18% since the beginning of the year. At the same time last year, it was trading more than 35% lower, while over the past five years, it has surged by an impressive 82%.*

Gold Spot Price Development Over the Last 5 Years (Source: Investing.com)*
Gold futures contracts also recorded strong performance. Those with June 2025 delivery reached a record high of $3,176 on the first day of April but later saw a slight decline. Similar to spot gold, their price was up 18% since the beginning of the year, while on a year-over-year basis, they increased by 34%. Over a five-year period, the value of gold futures surged by more than 80%.*

Gold Futures Price Development for June 2025 Delivery Over the Last 5 Years (Source: Investing.com)*
Trade War Deepens
Gold has recently been significantly influenced by the protectionist policies of U.S. President Donald Trump. One of the key concerns among investors was April 2, 2025, a date Trump declared as "U.S. Liberation Day," when reciprocal tariffs were set to be announced. At the time of writing, no further details had been disclosed. Initial reports suggested exemptions and limited tariffs on only certain countries, but by the end of March, this policy had expanded to include all nations, adding to market uncertainty. Gold prices were further driven up by the announcement in March of a 25% tariff on all imported cars and auto parts, along with duties on steel and aluminium. Trump had already unsettled global markets just days after taking office by signing a tariff order on imports from neighbouring Mexico, Canada, and China on February 1. However, except for Chinese tariffs, he later postponed their implementation for a month. Once they took effect, he again ordered delays or partial reductions. The affected countries strongly opposed these measures and issued their own reciprocal tariffs.[1]
Rising Inflation Fuels Growth
Despite Donald Trump's defence of his protectionist decisions, which aim to bring production back to the United States, they pose a risk in the form of rising inflation. The Federal Reserve (Fed) also highlighted this risk related to tariffs during its latest meeting in March. The central bank's projections for this year suggest that core consumer prices, a key inflation indicator, could rise to 2.8%, which is 0.3 percentage points higher than the December forecast. The Fed also expects economic growth to slow to 1.7%. [1] The uncertainty surrounding Trump's agenda contributed to the decision to keep rates unchanged. While the Fed acknowledged the possibility of two rate cuts this year, these will depend on the level of inflation and macroeconomic data.[2]
Geopolitical Tensions Persist
It’s not just trade relations that are uncertain but also geopolitical developments, which further support the price of gold. The situation in Europe is not improving, and similarly, efforts for a ceasefire between Russia and Ukraine remain stalled. Donald Trump also expressed anger, according to NBC News, after Putin disparaged the credibility of Ukrainian President Zelensky. Trump also mentioned potential tariffs on Russian oil if he feels that the peace agreement is not progressing as it should.[3] Trump further stoked tensions with his threats toward Iran, warning of bombings and secondary tariffs if the country does not reach a nuclear deal with the U.S. Gold has also risen against the backdrop of the war in Palestine, where Israel violated a January ceasefire in mid-March, reigniting battles on both fronts. According to the latest reports from Israeli daily Haaretz, however, Israel has offered a 40-day ceasefire, in exchange for the release of prisoners. Neither side has yet responded to the offer.[4]
Central Bank Demand Grows
Central banks are also contributing to the rally in the gold market as they continue purchasing gold as reserves. According to the World Gold Council, global institutions bought more than 1,000 metric tons of gold last year, with demand reaching record levels. The Council cites economic uncertainty as the driving force behind continued purchases[5], especially considering that central banks are less affected by gold prices than individual investors. Demand also grew for globally traded gold-backed ETFs, which in February saw an inflow of more than $9 billion, the highest in the past 3 years, according to the World Gold Council. The strongest demand came from North America, followed by Asia, while Europe saw a decrease in interest. In its March report, the Council forecasts that demand will continue to rise, supported by global uncertainty.[6]
Conclusion
In conclusion, gold is growing at an unprecedented rate, and it’s likely that a sharp reversal will not occur anytime soon. For instance, Goldman Sachs raised its price target for this year to $3,300, while Bank of America expects growth in the next nearly two years to reach $3,500.[7] [8] Key factors remain Trump’s aggressive trade policies, persistent geopolitical tensions, and demand from central banks and ETFs. Further price growth could also be supported by additional rate cuts from the central bank, but it is important to note that if inflation rises, the bank may opt for the opposite scenario and increase rates. Still, it’s important to remember that gold could enter a correction phase, which highlights the importance of proper diversification. [2]
*Past performance is not a guarantee of future results.
[1,2] Forward-looking statements are based on assumptions and current expectations that may be inaccurate or subject to changes in the current economic environment. These statements do not guarantee future performance. They involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those expressed or implied in any forward-looking statements.