Gold prices soared to a record high on Wednesday, as deepening fears over a prolonged trade war between the United States and China spurred a rush toward safe-haven assets.
Spot gold briefly touched $3,357.40 per ounce before retreating slightly from its peak. The precious metal has surged by nearly a third since the beginning of the year, marking one of its strongest rallies in recent history.
The sharp rise came after Federal Reserve Chair Jerome Powell warned that President Donald Trump’s tariff policies are likely to slow economic growth, drive up consumer prices, and increase the risk of unemployment.
Speaking at the Economic Club of Chicago, Powell cautioned that the aggressive tariffs imposed in recent weeks could derail the fragile post-pandemic recovery. His remarks rattled financial markets already on edge over global economic stability.
Gold is traditionally seen as a safe store of value during times of uncertainty, and its current rally has echoed past crises. Analysts have compared it to the period following the Iranian Revolution in the late 1970s, when gold prices surged by 120% in just three months.
“Gold is in full lifeboat mode,” said Stephen Innes, head of trading at SPI Asset Management. “It’s become the most crowded trade on the planet as the dollar stumbles under the weight of trade-policy whiplash.”
Investor demand for gold has been further amplified by what many see as a lack of confidence in global leadership. Jesper Koll of Monex Group described the rush to gold as a “trust hedge against both inflation and government recklessness.”
Koll also pointed to President Trump’s “move fast and break things” approach to economic policy as a driver of instability. “Everyone is looking for real assets as a hedge,” he said.
The latest wave of tariffs includes a 145% tax imposed by the Trump administration on a wide range of Chinese goods. In response, China slapped a 125% tariff on US imports, escalating tensions between the world’s two largest economies.
There is also growing concern over whether the US will impose sweeping tariffs on other trade partners. A 90-day pause has temporarily held off further action, but uncertainty remains high.
While the Trump administration insists the tariffs will revive American manufacturing, create jobs, and boost tax revenue, economists warn the fallout could be severe and investors are already seeking shelter in gold.
