US President Donald Trump’s tariffs on steel and aluminium imports have led to a surge in gold prices, breaking above $2,900 per ounce for the first time.
Gold prices have been boosted by fears of trade wars and geopolitical uncertainty. The US tariffs, which include 25% tariffs on steel and aluminium from all countries, have sent global markets into turmoil, pushing down several currencies. However, some assets, including gold, have benefited from the Trump chaos.
Historically, gold has been viewed as a safe haven during times of uncertainty, retaining its worth over time due to its scarcity and universality. The World Gold Council notes that gold is a highly liquid asset with no credit risk, making it a desirable investment option.
The price of gold has soared in the past when global markets faced uncertainty, such as during the housing crisis in 2008 and Russia’s invasion of Ukraine in 2022. However, this time, Trump’s tariffs have triggered a significant increase in gold prices, with spot gold rising by 0.3% to $2,916.37 per ounce.
Countries and experts have responded to Trump’s actions, with Canadian Prime Minister Justin Trudeau calling the tariffs “entirely unjustified”. China has also hit back at US imports, adding their own tariffs on a range of goods. While some fear that these moves could lead to a trade war, others believe that retaliation will be limited to specific sectors.
The impact of Trump’s tariffs extends beyond gold prices, with fears that they could reignite inflation and force the US Federal Reserve to keep interest rates elevated. This has led to a stronger dollar against most peers. Shares in Chinese steelmakers have also been affected, while Asian markets continue to struggle due to concerns about future economic changes.
Source: https://www.aljazeera.com/news/2025/2/12/why-are-gold-prices-soaring-amid-us-president-trumps-tariffs