Gold Tops $3,300 as Trade War Fears Trigger Flight to Safe-Haven Assets

LONDON – Gold prices surged to an all-time high on Wednesday, breaching the $3,300 per ounce mark, as heightened global trade tensions sparked fresh demand for safe-haven assets. The rally comes amid mounting anxiety over economic fallout from a new wave of tariffs introduced by the U.S., and a sharp decline in the U.S. dollar.

Bullion climbed as much as 2.7% in early London trading, hitting a record $3,317.75 an ounce before settling slightly lower at $3,308.04. The Bloomberg Dollar Spot Index slipped 0.5%, reaching a six-month low, as markets reeled from renewed uncertainty surrounding U.S. trade policy under President Donald Trump.

The U.S. administration this week launched a new investigation into tariffs on critical minerals, adding to a string of measures targeting semiconductors, pharmaceuticals, autos, and steel imports. These actions are fueling fears of a broader trade war and increasing concerns of a potential global recession.

“The gold market is thriving in this period of uncertainty, but the foundations are very tangible and real,” said Evy Hambro, global head of thematic and sector investing at BlackRock, in an interview with Bloomberg Television.

Market Reacts to Growing Uncertainty

The spike in gold prices reflects not only geopolitical instability but also growing speculation that the U.S. Federal Reserve will implement three or more interest rate cuts before year-end. Such easing measures are traditionally bullish for non-yielding assets like gold.

The precious metal has now gained 26% since the start of 2025, supported by rising inflows into gold-backed exchange-traded funds (ETFs) and continued central bank accumulation.

Despite a brief dip following reports that China may be open to trade talks—if the U.S. shows goodwill and appoints a clear envoy—investors remained largely focused on gold’s longer-term trajectory.

“The power struggle between major countries will continue,” said Luchen Wang, analyst at Galaxy Futures Co. in Shanghai. “Gold’s appeal as a safe-haven asset means it’s more likely to rise than fall in the near to medium term.”

$4,000 Price Target on the Horizon?

Analysts at Goldman Sachs Group Inc. project that gold prices could climb to $4,000 an ounce by mid-2026, citing persistent macroeconomic instability, robust central bank buying, and a weakening dollar as key catalysts.

The latest rally also spilled over into other precious metals, with silver recording moderate gains, while platinum and palladium remained largely unchanged.

Meanwhile, equity markets, particularly technology stocks, continued to retreat, compounding the shift into safe assets. Traders are struggling to price in the impact of erratic tariff policies, which have created significant short-term volatility across commodities, currencies, and equity sectors.

Looking Ahead

As the U.S. continues to escalate trade tensions and with global economic sentiment fragile, gold’s role as a portfolio hedge is likely to remain front and center for institutional investors.

“We’re in a market that’s being driven by headlines,” Hambro noted. “And when those headlines spell uncertainty, gold becomes the first port of call.”