Gold prices climbed by 2% on Thursday, continuing their sharp rise as heightened trade tensions between the U.S. and China sent investors rushing to safe-haven assets.
The rally followed U.S. President Donald Trump’s decision to hike tariffs on Chinese imports to 125%, even as he paused duties on 56 other countries for 90 days. China responded with an 84% tariff, deepening fears of a prolonged trade war between the world's two largest economies.
Gold, which is traditionally seen as a hedge against economic uncertainty and inflation, has gained more than 18% in 2025. Driving this surge are trade tensions, expectations of Federal Reserve rate cuts, ongoing geopolitical conflicts, and robust central bank demand.
The yellow metal also benefited from a weaker U.S. dollar and market volatility, as U.S. equities saw dramatic swings. After a major sell-off, the S&P 500 posted its strongest day since the financial crisis, reflecting investor relief following Trump’s partial tariff reprieve.
Analysts remain bullish. Some predict gold could reach $3,200 by month-end, especially if interest rates decline amid slowing growth and persistent inflation risks.
Investors now await upcoming U.S. inflation data, which could further influence expectations around Fed policy and the direction of gold prices.