Trump-Driven Market Turmoil Pushes Investors Toward Gold Amid Record Rally

London – Political and economic uncertainty driven by the policies of U.S. President Donald Trump has led investors to seek refuge in gold, fueling a surge in Exchange-Traded Fund (ETF) investments and pushing prices to new records.

Since Trump's inauguration in January, a mix of aggressive trade policies, diplomatic tensions, and market volatility has spurred demand for gold. Investors, initially concentrated in Europe, are now increasingly moving into the asset in the U.S., where ETF holdings have grown by 68.1 metric tons in 2025.

On Friday, gold prices hit a historic $3,004.86 per ounce, marking a 14% increase since the start of the year. This follows a 27% jump in 2024, reflecting sustained demand from investors wary of stock market instability. The S&P 500’s recent downturn, registering its biggest drop of the year on Monday, has further pushed retail and institutional investors toward gold as a safe-haven asset.

Political and Market Volatility Drive Gold Demand

Trump’s unexpected policy moves—including new tariffs, unconventional diplomatic strategies, and discussions about annexing Greenland—have unsettled global markets. The uncertainty has prompted investors to diversify away from equities, a trend not seen since 2021.

"Investors needed a major stock market scare to turn back to gold, and that’s exactly what’s happening," said Ole Hansen, head of commodity strategy at Saxo Bank. Analysts suggest that expectations of lower interest rates in the future could further boost gold demand.

Can Gold Sustain Its Momentum?

Despite the rush into ETFs, analysts caution that maintaining gold prices above $3,000 per ounce will require increased demand for physical gold bars and coins, especially in Europe and North America.

So far, demand for physical gold has been on the rise in Germany, reversing a decline from recent years. Additionally, gold investor activity on BullionVault, an online marketplace, saw its highest level since May 2021, with net gold purchases exceeding 0.2 metric tons.

While gold's momentum remains strong, experts note that continued central bank buying or stronger retail investment will be crucial for sustaining further price gains.