Gold prices surged to a record high this week, capping the strongest quarterly rally in nearly three decades, as investors seek protection from mounting global economic uncertainty fuelled by President Trump’s aggressive US trade tariffs.
On Tuesday, the precious metal climbed another 1.2 per cent to $3,120.20 per ounce, setting a new all-time high. Gold has now risen almost 20 per cent since the start of 2025, making it the best-performing asset this quarter and marking its strongest three-month performance since 1986.
The rally has been driven by escalating fears over global inflation and slowing growth, triggered by sweeping US import tariffs on 60 countries. Trump’s trade policy is expected to lift consumer price inflation in the US by at least one percentage point over the next three years, according to analysts — a scenario that historically boosts gold, which acts as a hedge when the value of cash and bonds declines.
Investor demand has also been fuelled by concerns that the Trump administration may impose tariffs on gold imports, as well as broader unease about the sustainability of US public finances.
Gold is increasingly flowing into the US in anticipation of tighter trade rules, while bullion is leaving vaults at the Bank of England, which holds the second-largest official gold reserves globally. Central banks in China and across Asia have continued to accumulate gold reserves since 2022, in a move widely seen as protection against potential US-led financial sanctions, following the freezing of Russian assets after its invasion of Ukraine.
Hamad Hussain, climate and commodities economist at Capital Economics, expects the rally to continue.
“Gold has arguably become a more attractive asset given the environment of heightened fiscal, inflationary, and geopolitical risks,” he said, forecasting that prices could reach $3,300 per ounce by year-end.
With inflation expectations rising and equity markets volatile, gold’s traditional role as a safe-haven asset is once again in sharp focus for both institutional investors and central banks — a signal of deepening uncertainty in the global economic outlook.
