President Trump’s recent tariff threats have triggered a significant surge in gold prices, pushing the precious metal to unprecedented highs and bringing the $3,000 per ounce milestone within reach. Spot gold reached a record $2,911.30 per troy ounce on Monday, marking its seventh record peak in 2025. This impressive performance follows a nearly 11% increase year-to-date, building upon a remarkable 27% gain in 2024.
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On Sunday, President Trump announced plans to impose new 25% tariffs on all steel and aluminum imports into the United States. He further stated his intention to implement reciprocal tariffs on all countries, matching the tariff rates levied by each nation. This announcement has sent shockwaves through global markets, driving investors towards safe-haven assets like gold.
The $3,000 Gold Price: Imminent Reality?
Independent analyst Ross Norman observes that gold is clearly targeting the $3,000 level, fueled by incredibly strong and relentless market momentum. The question now is not if, but when, this significant psychological barrier will be breached. The persistent upward trend, with minimal profit-taking retracements, underscores the powerful underlying momentum driving the gold market.
The proposed tariffs are widely perceived as inflationary and potentially capable of igniting trade wars. These concerns heighten the appeal of safe-haven assets like gold, traditionally viewed as a hedge against inflation and geopolitical instability.
US Gold Premium Signals Strong Demand
Reflecting the heightened demand, U.S. gold futures contracts are trading at a premium to the spot price, currently around $28. This premium indicates strong demand within the United States, prompting significant activity in the gold market.
London bullion market participants are actively seeking to borrow gold from central banks, which hold substantial bullion reserves in London, in response to a surge in gold deliveries to the United States. According to Daniel Hynes, senior commodity strategist at ANZ bank, gold held in the Bank of England vault is trading at a discount to the broader market, resulting in significant queues for withdrawals.
Global bullion banks are airlifting gold to the United States from major trading hubs serving Asian consumers, such as Dubai and Hong Kong, to capitalize on the unusually high premium. This logistical undertaking highlights the intensity of demand for gold in the U.S. market.
Record Gold Inventory Levels in COMEX Warehouses
Gold held in COMEX-approved warehouses has reached 34.60 million ounces, representing a more than 90% increase since late November and reaching its highest level since June 2022. The London Bullion Market Association also reported a 1.7% month-on-month decline in gold stored in London vaults in January, attributed to the surge in shipments to the United States.
Central Bank Demand Remains a Key Driver
Analysts and traders anticipate robust central bank demand for gold in 2025, further supporting price appreciation. The World Gold Council (WGC) reported that central banks acquired over 1,000 tons of gold for the third consecutive year in 2024, underscoring the ongoing strategic importance of gold in central bank reserves. This sustained demand from central banks provides a significant underpinning for the long-term strength of the gold market.
In conclusion, the confluence of escalating trade tensions, inflationary concerns, and robust central bank demand has created a potent combination driving gold prices to record highs. The $3,000 per ounce mark appears increasingly attainable as investors seek refuge in the safe-haven allure of gold.
