NEW YORK—The rapidly escalating economic unrest has seen a remarkable surge in gold prices, reaching unprecedented heights in recent days.
The value of gold futures exceeded $3,000 per troy ounce this week for the first time. Closely following suit, the price to acquire gold in New York’s spot market has been on a similar trajectory.
Historically, gold is considered a safe haven during uncertain periods, causing its demand to spike as investors become unsettled and seek security for their financial assets. Currently, the increase in gold prices coincides with an international trade war, sparked by the tariff strategies implemented by U.S. President Donald Trump. This situation has caused turmoil in global financial markets and has revived fears of inflation for both households and businesses.
If the present trends continue, experts predict that the value of gold could keep climbing in the forthcoming months. However, it’s crucial to remember that precious metals are known for their volatility, meaning their future remains unpredictable.
Currently, how does gold fare in the market?
As of Thursday, New York’s spot gold closed at a groundbreaking $2,988 per troy ounce, according to FactSet. This measurement, standardized at 31 grams, indicates an increase of more than $825 from its figure exactly a year prior.
Gold futures broke the $3,000 barrier on Thursday, although they slightly declined to over $2,994 by Friday afternoon.
The spot price for gold has risen by nearly 14% since the onset of 2025, according to FactSet. Conversely, the stock market is experiencing a downturn, with the S&P 500 dropping more than 5% this year, even stalwarts like Apple have suffered, facing its worst trading week in five years.
What factors are driving the surge in gold prices?
Much of the rise is attributed to economic insecurity. Unease among investors typically drives up the demand for gold, and lately, economic currents have been turbulent.
Today’s significant unease stems from the escalating trade conflict fueled by President Trump’s tariff policies. His unpredictable announcements of new levies and the retaliatory tariffs by close allies have resulted in uncertainty for businesses and consumers, who economists warn will bear the burden through increased costs.
Consumer confidence started dwindling at the year’s beginning due to inflation and tariff fears. These concerns have only grown, as shown in a preliminary survey from the University of Michigan released on Friday, which reported declining consumer sentiment for the third consecutive month.
RBC Capital Markets analysts emphasized in a Thursday note that gold’s price patterns remain intertwined with tariff developments. Despite recent cooling in inflation, tariffs still possess the potential to escalate prices, aggravating uncertainty—a factor supportive to gold.
Joe Cavatoni, the chief market strategist at the World Gold Council, remarked on Friday that the crossing of this gold price milestone was anticipated for months. Cavatoni attributes the trend to the current “global challenges and risks in managing money,” which push more investors towards gold as a reliable safe haven.
Additionally, analysts have noticed a notable demand surge for gold from central banks over the past year, attributed to geopolitical tensions, including the conflicts in Gaza and Ukraine.
Is adding gold to your investment portfolio wise?
Proponents of gold investment tout it as a ‘safe haven’ capable of diversifying and balancing an investment portfolio while providing a buffer against future risks. This appeal is further strengthened by the tangible nature of the asset and its potential to appreciate over time.
Nonetheless, it’s prudent to avoid putting all your financial resources into a single asset. Opinions diverge on gold’s efficacy as an investment. Critics argue that gold is not the inflation hedge it’s often claimed to be, suggesting more effective methods for safeguarding against capital erosion, such as derivative-based investments.
The Commodity Futures Trade Commission has previously cautioned individuals considering investments in gold. The commission warns of the volatility inherent to precious metals and highlights that during economic distress, sellers, rather than buyers, usually profit.
If you opt to invest in gold, it’s essential to be equipped with knowledge about secure trading practices and remain wary of potential scams and counterfeits within the marketplace.