NEW YORK (AP) — As economic uncertainty deepens globally, gold prices have reached new record highs. This trend is driven by investors seeking “safe havens” for their money during turbulent times. The current rally in gold prices coincides with U.S. President Donald Trump’s ongoing announcements of new tariffs on both allies and adversaries, causing volatility in financial markets and raising concerns about inflation for families and businesses.
On Tuesday, the International Monetary Fund reported that global economic outlooks, including that of the U.S., have significantly worsened due to Trump’s tariffs and the uncertainty they create. Additionally, Trump’s threats to remove Federal Reserve Chair Jerome Powell have further unsettled investors.
Analysts suggest that if current trends persist, gold prices could continue to rise into unprecedented territory. As of Monday’s close, New York spot gold hit a record $3,424.24 per troy ounce, which is approximately $1,097 higher than a year ago. Since the start of 2025, the price of spot gold has increased by more than 30%, according to data from FactSet. In contrast, the stock market has declined, with the S&P 500 down over 12% this year.
Gold futures also reached a record early Tuesday, briefly surpassing the $3,500 mark before falling back below $3,400 by late afternoon.
The primary reason for the rise in gold prices is uncertainty. Investor interest in gold typically spikes during periods of anxiety, which have been prevalent in recent months due to Trump’s escalating trade wars. These actions have created instability for businesses and consumers, who may face higher prices as a result.
Consumer confidence and global economic forecasts have deteriorated. The IMF predicts that the global economy will grow just 2.8% this year, down from its January forecast of 3.3%. For the U.S., the fund expects growth of only 1.8%, a sharp decline from its previous forecast of 2.7%. China, currently facing heavy tariffs from the U.S., is also expected to experience weaker growth.
Last week, Trump renewed threats to remove Powell and has intensified his public criticism of the Fed chair for not cutting interest rates. Such moves could lead to a crisis in global financial markets over concerns about the Fed’s independence and its ability to control inflation.
Central banks worldwide have shown strong demand for gold amid ongoing geopolitical tensions, including conflicts in Gaza and Ukraine.
While gold is often considered a “safe haven” investment, experts caution against putting all one’s resources into it. Critics argue that gold isn’t always an effective hedge against inflation and that there are more efficient ways to protect capital, such as derivative-based investments.
The Commodity Futures Trading Commission has warned investors to be cautious when investing in gold, noting its volatility and the potential for scams.
— new from AP News