Investors are rushing into gold at the fastest pace since the onset of the Covid-19 pandemic, as mounting fears over US President Donald Trump’s impending tariff announcements drive a flight to safe-haven assets. According to the Financial Times, gold hit a record high of $3,148.88 per troy ounce on Tuesday, marking a 19% gain this year, as traders brace for the economic fallout of Trump’s trade policies.
With the President set to unveil a sweeping new tariff package on Wednesday, a day he has labeled “liberation day,” market uncertainty has surged. Analysts warn that the tariffs could stifle global growth, prompting investors to shift into traditional hedges such as gold and US Treasuries. Krishan Gopaul, senior analyst at the World Gold Council, told the Financial Times, “Uncertainty is one of the main factors that has led to a renewed interest in gold. There is a general risk-off sentiment in the market at the moment.”
Data from Standard Chartered shows that gold-backed exchange-traded funds (ETFs) have seen inflows of over $19.2 billion in the first quarter alone—the largest influx in dollar terms since the pandemic. Meanwhile, a Bank of America survey revealed that investor cash holdings have risen at the fastest monthly pace in five years, highlighting growing caution.
The effects of this shift have also been felt in the bond market, where US Treasury yields have fallen as investors seek protection from potential economic turbulence. Ten-year Treasury yields dipped to 4.16% on Tuesday, close to their lowest levels of the year. In Europe, German Bund yields have similarly retreated, dropping below 2.7% for the first time since early March.
While central bank purchases have been the dominant driver of gold demand in recent years, the surge in ETF inflows suggests that a broader range of investors are now turning to bullion as a hedge against inflation and stock market volatility. Suki Cooper, a precious metals analyst at Standard Chartered, noted that “the resurgence in ETFs has been the most notable shift in gold dynamics in recent weeks,” fueled by expectations of lower yields elsewhere and fears that tariffs could dent economic growth.
The surge in demand has also led to an influx of physical gold bars into New York, where stockpiles on the Comex exchange have reached record levels. On Wall Street, defensive stocks such as UnitedHealth and HCA Healthcare have gained about 10% over the past month, while the broader S&P 500 index has slipped 5%.
As fears over trade policy disruptions mount, analysts predict that gold’s rally could continue. Macquarie has now revised its forecast, expecting prices to reach $3,500 per ounce this year, underscoring bullion’s role as the asset of choice in times of economic uncertainty.
