The surge came alongside a weakening US dollar and renewed uncertainty over President Trump’s proposed tariffs on critical minerals.
Gold climbed by $107.90, or 3.4 per cent, to $3,326.60 per troy ounce—marking not only a historic high but also the steepest daily gain since April 2020. The rally brings gold’s total rise to nearly 6 per cent, or $200 per ounce, since Trump signalled a sweeping new wave of global tariffs.
The dollar index, which tracks the US currency against six international peers, fell 0.65 per cent to its lowest level since April 2022. A weaker dollar makes gold more attractive to international buyers by lowering the cost of purchase. The pound gained 0.44 per cent against the greenback to reach $1.32—its highest point since October last year.
The latest spike in gold prices is being driven by mounting fears that Trump’s trade policies could reignite economic uncertainty. His latest threat—to impose tariffs on all imports of critical minerals, a market heavily controlled by China—has rattled investors and intensified the flight to more secure assets.
Goldminers listed in London were quick to benefit. Shares in Endeavour Mining rose 6.4 per cent, while Fresnillo added 2.2 per cent, helping to lift the FTSE 100 by 26.48 points, or 0.3 per cent, to close at 8,275.60—its fifth consecutive day of gains.
While the FTSE 100 rose on the strength of global commodity stocks, the more domestically focused FTSE 250 dipped slightly, down 2.13 points to 19,265.81.
Gold has been on a sustained upward trend since the start of 2023, underpinned by geopolitical tensions and persistent investor demand for stability. Its appeal lies in its scarcity and inherent value—unlike currencies, which central banks can print, gold supply is fixed. That finite quality has made it a go-to asset in times of volatility.
Central banks have also been quietly increasing their gold reserves, contributing further to demand. At the same time, the prospect of interest rate cuts by major central banks has reduced the opportunity cost of holding non-yielding assets like gold, adding fuel to its rally.
Investor sentiment was further buoyed by political signals from the US. On Tuesday, JD Vance, vice-president under Trump, raised hopes for a post-Brexit trade agreement, stating there was a “good chance” of a “great” trade deal between the UK and the US because “Trump loves the United Kingdom”.
With the dollar under pressure and the outlook for trade relations murky, gold’s momentum shows no sign of abating. For now, investors appear to be doubling down on what they know best: when in doubt, buy gold.
Jamie Young
Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the 'covid era' and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine's coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk
