Gold prices remained firmly near record highs on Wednesday, as Donald Trump’s renewed tariff threats fueled concerns over global trade tensions, driving investors toward safe-haven assets. With uncertainty looming over potential U.S. trade policies, gold’s appeal as a hedge against market volatility and economic disruptions has strengthened.
The latest tariff remarks have reignited fears of protectionist policies, which could disrupt global trade and weigh on economic growth. Investors have responded by increasing their exposure to gold, which traditionally serves as a store of value during times of geopolitical or financial uncertainty. The metal has also benefited from persistent inflation concerns, which continue to shape monetary policy expectations.
At the same time, the US dollar has struggled to gain momentum, providing additional support for gold prices. While the Federal Reserve has maintained a cautious stance on rate cuts, any signs of economic slowdown or further escalation in trade tensions could pressure the dollar further, making gold more attractive to international buyers.
Gold US Dollar 1-D Chart as of February 20, 2025 (Source: TradingView)
Rising demand from central banks and institutional investors has also played a role in gold’s sustained strength. As global economies navigate uncertain conditions, central banks have continued to accumulate gold reserves, reinforcing its role as a critical asset in times of financial instability.
However, analysts caution that gold’s upward trajectory could face resistance if economic data signals a stronger-than-expected U.S. economy, prompting the Fed to delay policy easing. If Treasury yields remain elevated, the opportunity cost of holding gold—an asset that offers no yield—could limit further gains.
For now, gold remains in a strong position, supported by a combination of geopolitical risks, policy uncertainty, and safe-haven demand. Investors will be closely watching upcoming U.S. economic data and Federal Reserve statements to determine whether gold can break further into record territory or consolidate near its current levels.
