Well, after a brief pause, the rise of gold has continued on its seemingly endless upward trajectory over the past week.
As recently as 8 April, gold was asking US$3,030 an ounce. Today, bullion has once again breached a new record high, topping US$3,200 an ounce. The precious metal clocked a new spot price high of US$3,216.87 an ounce just this afternoon.
That's a rise worth just over 6% in just a few days.
This probably won't come as a surprise to anyone who's been watching the financial markets over the past week or two.
Why are investors buying precious metals?
Gold is the classic 'safe-haven' asset. Investors have always flocked to the precious metal's 'physical store of value' during uncertain times. Gold is always favoured as an investment if investors are worried about the state of the economy or have uncertainty over the future.
The past two weeks have bought spades of both.
When US President Donald Trump announced his 'Liberation Day' tariffs, it was obvious that investors around the world became fearful of their potential impacts on global growth and trade.
Even though Trump has now paused these tariffs for 90 days, an obvious capitulation to the market's less-than-enthusiastic reaction, uncertainty abounds. After all, Trump had previously stated that his policies wouldn't change and that they were necessary for a new American 'golden age'.
Yes, he has paused the tariffs. But there is still a baseline 10% tariff on all imports entering the United States as we speak. Additionally, no one knows what might happen in 90 days' time. Trump could very well bring these tariffs back in with a vengeance, given that he has invested a lot of political capital into the plans.
All of this is catnip for the gold price. Uncertainty abounds. The global economic outlook remains foggy. And investors are actively questioning the economic leadership of the United States, particularly the status of the US dollar as the world's reserve currency. All in all, there are many reasons for nervous investors to seek a safe harbour.
Can gold climb even higher?
That's the billion-dollar question. I am not a gold expert. However, I do think that gold does indeed have the potential to hit even higher records.
The uncertainty surrounding Trump's economic policies is not going away, as we've already established.
In addition, gold had already been climbing long before Trump took office. There were already fears about the United States' debt levels. Frantic buying from central banks around the world, particularly in China, has also been a tailwind for the gold price. None of these factors are going away anytime soon.
As such, I wouldn't be surprised to see more record highs for the gold price in 2025 and beyond.
Let's see what happens.
