Markets across the globe are currently experiencing a downturn, largely fueled by concerns over U.S. President Donald Trump’s protectionist trade policies. As a result, investors are increasingly turning to gold, with futures reaching unprecedented highs when trading commenced on Monday.
Trump is set to impose his latest tariff ratifications on Wednesday, a move he has dubbed “Liberation Day.” During uncertain times, gold tends to be a popular choice for investors looking for a safe haven for their assets, and Trump’s aggressive tariffs have sparked a global trade war that has significantly disrupted financial markets and threatens to spark inflation, affecting both businesses and households alike.
If the current trend persists, experts predict that gold prices could continue to increase over the coming months. However, volatility is a typical characteristic of precious metal investments, making long-term predictions unreliable.
The current market value of gold on Monday reached a record-breaking $3,122.80 per troy ounce, the standard measurement for precious metals. This figure is approximately $886, or 40% more than the price a year ago. Since the start of 2025, the price of spot gold has climbed by 19%, according to the data firm FactSet. Meanwhile, the stock market has seen a downward trajectory, with the S&P 500 index dropping by 4.5% this year, impacting even well-established stocks.
Gold futures were not left out, hitting new peaks at nearly $3,157.40 per ounce in trading on Monday.
So, why are gold prices rising? Much of this can be attributed to widespread uncertainty. During periods of economic unease, the demand for gold typically surges, as investors seek security. The major point of concern revolves around Trump’s intensifying trade conflict. His unpredictable announcements of new tariffs and the retaliatory measures from some of the U.S.’s closest allies have left businesses and consumers alike feeling uncertain about what comes next. Economists predict that consumers will bear the brunt of these tariffs through increased prices.
Consumer and business confidence in the U.S. began waning at the onset of the year due to fears surrounding inflation and the implications of tariffs. These issues appear to be deteriorating further, as U.S. consumer confidence has been steadily decreasing in recent months.
Additionally, analysts have noted that central banks around the world have been increasingly interested in gold against the backdrop of geopolitical tensions, which include conflicts in Gaza and Ukraine.
But is gold a viable investment option? Proponents of gold investments often describe the metal as a “safe haven,” and suggest that it can help diversify and stabilize an investment portfolio, potentially mitigating risks. Investors may find solace in tangible assets like gold, as it has the potential to appreciate over time.
Nonetheless, financial experts advise against concentrating too much on a single form of investment. There’s also a debate regarding gold’s efficiency as an inflation hedge; some critics argue that there are more effective methods to guard against capital loss, such as derivative-based investments.
The Commodity Futures Trade Commission has previously cautioned individuals about investing in gold, noting that precious metals can be quite volatile. Prices tend to rise with increasing demand, which means that during periods of economic fear or instability, the usual profit-takers are the sellers.
For those considering investing in gold, it’s crucial to gain a thorough understanding of secure trading practices and remain alert to potential fraud and counterfeit issues prevalent in the market.