(qlmbusinessnews.com . Tues 22nd Apr, 2025) London, UK —
Safe Haven Surge: Why Gold Just Reached an All-Time High Amid Trade Tensions
The price of gold has climbed to a fresh record as mounting investor anxiety over the escalating trade dispute between the United States and China sends shockwaves through global markets.
Spot gold reached $3,357.40 (£2,540) per ounce earlier on Wednesday before easing slightly from its peak. The precious metal has seen its value increase by approximately one-third since the beginning of the year.
The surge gained momentum following remarks from Jerome Powell, the chairman of the US Federal Reserve. Mr Powell cautioned that President Donald Trump's aggressive tariff policies could lead to slower economic growth, rising consumer prices, and increased risks of unemployment in the US.
Gold is traditionally regarded as a ‘safe haven' asset, attracting investors seeking stability during periods of economic volatility and geopolitical uncertainty.
Speaking at the Economic Club of Chicago, Mr Powell highlighted that recently announced, higher-than-anticipated tariffs could dampen US economic expansion and inflate costs for ordinary consumers. His comments came amidst significant turmoil on international financial markets, reacting nervously to the implementation of new import taxes and the intensifying trade conflict.
Market analysts suggest gold is now firmly in “full lifeboat mode”. Stephen Innes, head of trading and market strategy at SPI Asset Management, commented that gold has become “the most crowded trade on the planet”.
“The dollar is stumbling under the weight of trade-policy whiplash, and portfolio managers have lost faith in anything that involves political discretion,” Mr Innes added.
Some commentators are drawing parallels between the current gold rally and the period surrounding the Iranian Revolution over four decades ago, which saw prices skyrocket by nearly 120% between November 1979 and January 1980.
The metal breached the $3,000 per ounce mark for the first time only last month, as deep uncertainty about the global economic impact of the trade war took hold.
Jesper Koll, from the advisory firm Monex Group, noted that investors are piling into gold as “a trust hedge against both inflation and government recklessness”.
“Everyone is looking for ‘real' assets,” Mr Koll stated. “It's increasingly clear that Team Trump's ‘move fast and break things' approach to policy making will not change.”
The imposition of substantial tariffs by the Trump administration – taxes levied on businesses importing goods – has stoked fears of inflation. This, in turn, has propelled investors towards assets like gold. Reports indicate President Trump has imposed taxes of 145% on Chinese goods since returning to office in January, prompting China to retaliate with 125% tariffs on US imports.
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