Gold Soars towards $3,000 Milestone Amid Trump's Tariff Threats
U.S. President Donald Trump's latest tariff announcements have triggered a surge in demand for gold, propelling the safe-haven asset to record highs and within reach of the coveted $3,000 per troy ounce level.
Spot gold surged to a peak of $2,911.30 on Monday, marking its seventh record-breaking summit in 2025. Gold prices have witnessed a remarkable surge of nearly 11% since the start of the year, continuing an impressive 27% gain from 2024.
Trump's proposed 25% tariffs on steel and aluminum imports have fueled inflationary concerns and fears of trade wars, boosting demand for safe-haven investments such as gold, which is traditionally viewed as a hedge against inflation and geopolitical instability.
In the U.S., gold futures have traded at a premium to spot prices, reflecting concerns over the import tariffs. Gold held in London vaults has also witnessed increased borrowing activity from central banks, who store bullion in the city, as shipments to the U.S. surged.
The inflow of gold into COMEX-approved warehouses has reached 34.60 million ounces, a 90% increase since November, marking the highest levels since June 2022. Conversely, the London Bullion Market Association reported a 1.7% monthly decline in London gold storage to 8,535 metric tons in January, attributed to shipments to the U.S.
Central bank demand for gold remains robust, with analysts anticipating continued purchases throughout 2025. In 2024, central banks acquired over 1,000 tons of the metal for the third consecutive year, according to the World Gold Council.
China's central bank has added gold to its reserves for three consecutive months in 2025, and the country's financial regulator has permitted insurance funds to invest in gold, further bolstering bullish sentiment for the asset.