Gold Prices Can't Stop Breaking Records — Even as Stocks Slump
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As the saying goes, “What goes up must come down,” but if you’ve been checking out the price of gold lately, you might think this axiom doesn’t apply to the precious metal.
On Wednesday, spot gold hit another all-time high, reaching $3,061.60 per ounce before dropping slightly to settle at $3,057.50 by the end of the trading day. Over the past year, gold prices have shot up by roughly 40% — a remarkable rally that (for the moment, at least) shows no signs of slowing down. Just since the start of 2025, it has risen nearly 15%.
As recently as January, experts predicted that gold might reach the symbolically significant threshold of $3,000 an ounce by the end of the year. In reality, it only took until March 14 to hit that benchmark. It's continued to tick upward in the days since.
“Gold is grinding higher on elevated uncertainty,” metals trader Tai Wong told Reuters.
What’s propelling the yellow metal to each fresh new record it notches?
In a word, uncertainty. With the Trump administration’s trade policy changing seemingly by the hour, stubbornly persistent inflation and concern that tapped-out — and freaked-out — Americans are keeping their wallets closed, investors are facing a perfect storm of economic uncertainty.
In their hunting for a safe harbor, it seems many are turning to gold, perhaps the oldest and most enduring safe-haven asset. When economic or geopolitical conditions get bumpy, investors flock to gold because of its perceived stability compared to the volatility of stocks or commodities.
Gold also is often held as a hedge against inflation, another contributor to its current popularity. While inflation has certainly cooled from the 9.1% peak rate it hit in June 2022, it remains higher than officials — not to mention ordinary consumers — like to see.
What’s more, policymakers just sent their clearest signal yet to the market that they expect inflation to remain uncomfortably high through 2025. On Wednesday, the Federal Reserve’s rate-setting committee released its quarterly economic projections, which showed that officials now expect so-called core inflation to increase at an annualized rate of 2.8%. That’s up from a projection of 2.5% officials released just three months ago and nearly a full percentage point higher than the central bank’s 2% target.
Trump’s trade wars take gold higher
If “uncertainty” is the word that best sums up the engine powering gold’s recent rise, the second-most-important word of explanation would be one that’s been in a lot of headlines lately: tariffs. Aggressively protectionist trade policies being pursued vigorously, and sometimes chaotically, by the Trump administration are driving much of the gloomier outlook around inflation and economic activity.
In addition to raising steel and aluminum tariffs to 25%, raising tariffs on Chinese imports and levying 25% tariffs on Canadian and Mexican imports (with some exceptions), President Donald Trump and White House officials have announced a new raft of trade sanctions, unprecedented in size and complexity, currently scheduled to take effect April 2. These “reciprocal tariffs” would attempt to capture not just what tariffs other countries levy on U.S. imports, but a host of other policies the administration claims hurt the U.S.
Secretary of the Treasury Scott Bessent said on Fox Business that trading partners would face a “tariff wall” if they did not agree to negotiate terms the administration finds more favorable. But nobody really knows what that looks like.
“We all await further clarity on the feed-through effects of trade policy right now,” Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, said in a statement Wednesday.
Despite this lack of visibility, economists across the political spectrum warn that tariffs will worsen inflation by driving prices paid by American businesses and consumers higher. Expectations that these policies could hurt economic growth have also driven down the value of the dollar. Gold and the dollar typically move inversely to each other; a weak dollar tends to be correlated with robust gold prices, and vice-versa.
Ultimately, when Wall Street is jittery, gold is what sparkles in investors’ eyes.
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