Gold Surges to All-Time High Amid Escalating US-China Trade War Fears
Investors flock to safe-haven asset as US-China trade tensions trigger economic uncertainty and inflation fears.
- Gold prices have soared to a new record high
- The latest surge follows cautionary remarks from Federal Reserve Chair Jerome Powell
- The current gold rally is drawing comparisons to historic surges
Gold prices have soared to a new record high as growing tensions between the United States and China fuel investor anxiety and drive demand for safe-haven assets.
On Wednesday, spot gold peaked at $3,357.40 (£2,540) per ounce before easing slightly. The precious metal has gained nearly 33% since the start of the year, buoyed by concerns over global economic stability.
The latest surge follows cautionary remarks from Federal Reserve Chair Jerome Powell, who warned that President Donald Trump’s aggressive tariff policies could slow economic growth, push up consumer prices, and increase the risk of job losses.
“Higher-than-expected tariffs could lead to slower US economic growth and rising inflation,” Powell told the Economic Club of Chicago.
The backdrop of uncertainty—marked by new US import duties and China’s retaliatory tariffs—has rattled global markets and pushed investors to seek refuge in gold.
“Full Lifeboat Mode”
“Gold is in full lifeboat mode,” said Stephen Innes, Head of Trading and Market Strategy at SPI Asset Management. “It’s the most crowded trade on the planet right now.”
Innes noted that the US dollar is also under pressure, as investors lose confidence in politically driven fiscal strategies.
The current gold rally is drawing comparisons to historic surges, such as the spike during the Iranian Revolution, when gold prices jumped by nearly 120% between November 1979 and January 1980.
Last month, gold crossed the $3,000-per-ounce threshold for the first time, signaling heightened investor unease over the escalating trade conflict and broader global instability.
A Hedge Against Uncertainty
Jesper Koll, a strategist with Monex Group, said the move to gold reflects growing distrust in traditional economic levers.
“Investors are seeking real assets as a hedge against inflation and reckless policymaking,” he explained. “Trump’s ‘move fast and break things’ approach is here to stay.”
President Trump’s return to the White House in January brought sweeping tariff hikes—145% on Chinese imports, met with 125% retaliatory tariffs from Beijing. Concerns also linger over whether similar duties on other nations will be implemented, with a 90-day pause currently in place.
While the Trump administration argues that the tariffs will bring jobs and manufacturing back to the US, critics warn they could backfire—triggering inflation and weakening consumer confidence.
For now, as global uncertainty deepens, gold continues to glitter as a symbol of stability in an increasingly volatile economic landscape.
