The price of gold has reached unprecedented heights, driven by investors seeking refuge in the safe-haven asset as trade war anxieties escalate following US President Donald Trump’s tariff announcements. Spot gold prices surged 1.3% to $2,910.75 per ounce, while gold futures climbed 1.5% to $2,931.10 after Trump revealed plans for a 25% tariff on all steel and aluminum imports, impacting even close allies like Canada and Mexico.
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This Monday’s formal announcement from the President signifies a significant escalation in his trade policy reformation. With gold’s upward trajectory, experts predict further gains, with the $3,000 per ounce threshold appearing increasingly attainable. Richard Franulovich, an analyst at Westpac Banking Corp, observes that gold is in a favorable position, benefiting from the unpredictable nature of the current political landscape and tariff threats, enhancing its appeal as a safe haven. This surge follows a 10% increase in gold prices in 2025, building upon a substantial 26% rise in 2024.
Trump’s Tariff Strategy and its Impact on Gold
The timing of Trump’s Sunday tariff announcement, according to Kathleen Brooks, research director at XTB, suggests a deliberate move, potentially indicating a firm commitment to these tariffs on industrial metals. The targeted nature of these tariffs on specific products, rather than countries, complicates negotiations. This strategic approach could further propel gold prices as demand increases to bring gold onshore to the US, anticipating potential tariffs on precious metals. The key question for investors is whether gold will breach the psychologically significant $3,000 mark fueled by these escalating tariff levies. Currently, gold has already seen a $25 increase early Monday. Goldman Sachs’ prediction of gold reaching $3,000 per troy ounce by December 2025 seems imminent.
Geopolitical Uncertainty Fuels Gold’s Safe-Haven Appeal
Heightened geopolitical tensions and the potential for further US tariffs contribute to gold’s attractiveness as a safe haven. Goldman Sachs analysts highlight that geopolitical shocks, including tariffs, typically bolster both gold and the dollar. David Morrison, senior market analyst at Trade Nation, notes that while gold’s daily MACD indicates overbought territory, suggesting caution for buyers, gold’s year-to-date advance has been remarkably steady. The consistent upward progress since December underscores the growing recognition of gold’s potential as a safe haven and store of value in the face of escalating trade disputes.
Investing in Gold: Exploring Various Avenues
Gold, classified as an alternative investment, offers diversification from traditional assets like bonds and equities. Investment options range from physical gold to exchange-traded funds (ETFs) and exchange-traded commodities (ETCs). ETFs and ETCs provide convenient exposure to gold without the complexities of physical ownership. These funds track the price of gold bullion or futures, offering liquidity and accessibility. However, investors should consider ongoing charges, platform fees, and potential currency fluctuations.
Gold ETFs and ETCs: A Closer Look
Investing in gold ETFs or ETCs offers a streamlined approach to gold investment without the logistical challenges of physical gold. These funds derive their value from underlying gold assets, trading like stocks and providing liquidity. Costs include ongoing charges and platform fees. Currency fluctuations can impact performance, particularly for sterling-denominated products due to gold’s US dollar pricing. High-performing US-traded gold ETFs include DB Gold Double Long Exchange Traded Notes (DGP), ProShares Ultra (UGL), and Invesco DB Precious Metals Fund (DBP). UK investors might consider Invesco Physical Gold ETC (SGLPL.XC), iShares Physical Gold ETC (SGLNL.XC), or the ethically focused HANetf Royal Mint Responsibly Sourced Physical Gold (RMAP).
Gold Mining Stocks: Leveraging Company Performance
Investing in gold mining companies offers another avenue for gold exposure, allowing investors to capitalize on company growth and profitability, potentially including dividends. This strategy provides leverage to gold price movements and the operational efficiency of mining companies. US investors might consider Galiano Gold (GAU), Equinox Gold (EQX), ElDorado Gold (EGO), or Barrick (GOLD). UK-listed options include Empire Metals (EEE.L), Serabi Gold (SRB.L), and Resolute Mining (RSG.L).
Digital Gold: A Modern Investment Approach
The Royal Mint’s “digital gold” offers a flexible entry point for gold investment, allowing purchases of fractional gold bars starting from £25. This facilitates gradual portfolio building through monthly investments. A storage fee of 0.5% plus VAT applies. As with all investments, past performance is not indicative of future results, and diversification is crucial for risk management. Gold should be considered as a component within a broader investment strategy. Remember to consult with a financial advisor before making any investment decisions.
