Gold Prices Surge Amid Rising Tariff Concerns and Global Tensions
New York, Thursday, 20 February 2025.
Gold prices hit record highs due to investor concerns over U.S. tariff threats and global trade tensions, rising to $2,954.69 per ounce.
Record-Breaking Rally
Gold has marked its tenth record high of 2025, with spot prices reaching $2,954.69 per ounce [1]. This remarkable surge represents a 12 percent gain since the beginning of the year [1], as investors seek safe-haven assets amid escalating global trade tensions. The precious metal is now within striking distance of the psychologically significant $3,000 level, with Goldman Sachs projecting an end-2025 target of $3,100 per ounce [2].
Trade Tensions and Tariff Impact
President Trump’s recent announcement of plans to implement new tariffs on lumber, cars, semiconductors, and pharmaceuticals has intensified market concerns [1]. These threats come on top of existing measures, including a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum [1]. The Federal Reserve has indicated that these initial policy measures could increase inflation rates, potentially affecting their interest rate reduction plans [1]. According to StoneX, these trade tensions have already resulted in the movement of over 2,000 tonnes of gold to the United States [2].
Global Central Bank Activity
Central banks worldwide continue to demonstrate strong appetite for gold. The People’s Bank of China added 5 tonnes to its reserves in January 2025, bringing its total holdings to 2,285 tonnes [5]. Similarly, the Reserve Bank of India resumed its gold purchases in January, adding 2.8 tonnes to its reserves [3]. This follows a remarkable trend from 2024, where central banks collectively purchased over 1,000 tonnes of gold, accounting for 29% of new mine supply [2].
Market Outlook
Analysts remain bullish on gold’s prospects, with UBS recently raising its 2025 forecast to $2,900, suggesting potential peaks of $3,200 [2]. Bank of America projects that a combined 10% increase in investor demand could push prices to $3,500 [2]. However, market observers note that potential peace talks between Ukraine and Russia could temporarily affect gold prices [1]. The precious metal’s trajectory will likely continue to be influenced by geopolitical developments and central bank policies in the coming months.