Concerns about tariffs and rising global uncertainty cause gold prices to rise sharply

Kitco Media
By Naeem Aslam
Published:
Updated:
Kitco Commentaries
Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Concerns about tariffs and rising global uncertainty cause gold prices to rise sharply teaser image

Gold price is trading around $2,910 an ounce at the time of writing this article. The shinning metal is experiencing another stellar performance as the price of the yellow metal is up 11.35 percent year-to-date. The price of the yellow metal has been going up steadily as buyers look for safe assets as economic and political pressures rise. Here is more on this

Key Reasons for Gold's Rally: Tariffs Become A reality 

Until yesterday, there has been hope among investors that President Trump will show some sort of mercy in terms of actual implementation of tariffs. However, the results were totally different when he spoke yesterday. He delivered what he said. 

The new U.S. taxes on goods from Canada, Mexico, and China went into effect today and have made gold even more popular. These steps include putting a 25% tax on goods from Mexico and Canada and a 10% tax on goods from China. This makes people even more worried that the global trade war is getting worse. As worries about the effects on the economy grow, buyers are moving their money into gold as a safety net against instability.

Investors want gold Amid political chaos 

The U.S. political climate is unstable because Trump 2.0 is living up to the promise of uncertainty he made during his campaign for re-election. Western buyers are buying more gold because they don't know what will happen with U.S. economic policy, international relations, and trade talks. This is a trend that is usually led by central banks in developing markets. Institutional buyers are buying a lot of gold quickly because they are worried about the security of standard assets like stocks and bonds.

Falling Treasury yields and a weaker U.S. dollar

The fall in U.S. Treasury yields is another thing that is helping gold go up. This is because falling yields make non-yielding investments like gold more appealing. The U.S. dollar has also been weaker lately because people don't know how Federal Reserve policy will change in the next few months. A weaker dollar usually makes gold more appealing to buyers from other countries, which increases demand even more.

What Could Make Gold's Rally Last Longer?

Pay attention to U.S. labour market data. Gold traders are now looking ahead to the important U.S. Nonfarm Payrolls (NFP) report on Friday and the ADP job report on Wednesday. These reports will show how strong the U.S. job market is and could change how the Federal Reserve sets interest rates.

If job numbers are bad, people may think that the Fed will cut rates in 2025, which will make gold prices go up even more. If job data comes in higher than expected, it could temporarily make the dollar stronger and push gold down.

Possible cuts in interest rates from the Federal Reserve

There is more and more talk about lowering interest rates later this year, even though inflation is still above the Federal Reserve's goal and economic data is giving mixed signs. If the Federal Reserve shows that it is more willing to help businesses, real yields are likely to go down. This would make gold an even better investment.

Technical Price Levels 

The shinning metal has broken out of the downward trend on the hourly time frame which shows that bulls are taking control of the price. However, traders should also practice some caution as the RSI is in the overbought region which tells us that the price can actually retrace from its current levels.

article imageGold Rally: Chart by XTB 

In conclusion

In 2025, gold has gone up a lot. This is because of changing investor mood, rising global risks, and economic uncertainty in the U.S. Gold prices could go down in the short term, but the long-term picture is still positive, especially if the Federal Reserve moves towards rate cuts or if the political unrest in the U.S. gets worse. This week, important job data is coming, so traders should be ready for more price changes in gold. Any surprises in economic signs could give the valuable metal even more energy.

Kitco Media

Naeem Aslam

I am a former Hedge Fund Trader with over 15 years of experience in investment banking. During my early career, I was awarded a national award (Young Irish Broker) in 2010. Over the years, I have worked with Bank of America in equity trading and with Bank of New York in hedge fund trading.

I specialize in commodities and cover gold prices extensively. I frequently partake across all major tier one media channels such as CNBC and Bloomberg discussing investment strategies around major macroeconomic and political events.

I regularly participate in panel discussions- have spoken at the Headquarters of the European Parliament in Brussels. I held several one-to-one interviews with Governors of various Central Banks, Economic Ministers and C-level Executives. I also MC at Family Office Conferences and I am always eager to help for similar notable conferences.

I am a founder and CIO of Zaye Capital Markets which specializes in providing research on traditional and digital assets. I also Co-founded CompareBroker.io, a leading broker comparison site.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.