Gold Prices Hold Strong Amid Trump’s Tariff Policies and Global Uncertainty

Gold has remained a favored safe-haven asset in 2025, propelled by new trade tariffs introduced by U.S. President Trump, a weaker U.S. dollar, and ongoing geopolitical uncertainties. As investors seek stability, gold prices continue their upward trend, reflecting sustained demand.

Gold Market Dynamics and Price Fluctuations

Current Market Performance
As of March 3, 2025, gold is priced at $2,875 per troy ounce, experiencing a slight dip of 1.2% from its high of $2,956 on February 24, 2025. Despite this pullback, gold has shown resilience in response to trade tensions, central bank activity, and macroeconomic adjustments.

Key Factors Driving Gold Prices:

These elements have shaped market sentiment, keeping gold’s safe-haven appeal intact.

Trump’s Trade Tariffs and Their Impact on Gold

Market attention has been focused on Trump’s upcoming tariffs on Canada and Mexico, set to go into effect on March 5, 2025. The anticipation of trade disputes is fueling investor caution, leading to increased gold purchases.

How Tariffs Affect Gold Prices:

Given these pressures, experts predict that gold will remain a volatile yet sought-after asset.

Macroeconomic Trends and Gold’s Performance

Lower U.S. Interest Rates Favor Gold
The Federal Reserve has played a pivotal role in gold’s ongoing rally. After a 50-basis-point rate cut in December 2024, the Fed’s benchmark interest rate stands at 4.25%, with another potential 25-basis-point cut in the pipeline for March 19, 2025.

Why Lower Interest Rates Support Gold Prices:

Geopolitical Risks and Gold’s Strength
Trade disputes between the U.S. and China continue to fuel demand for gold. With Trump’s tariffs tightening global markets, investors are hedging against potential losses by increasing gold holdings.

Meanwhile, ongoing unrest in the Middle East has further bolstered gold’s role as a risk-off asset, ensuring consistent demand.

Currency Movements and Central Bank Demand

U.S. Dollar Weakness Boosts Gold
The U.S. dollar has depreciated by 3.5% against a basket of major currencies since January 1, 2025. A weaker dollar makes gold more attractive for foreign investors, lifting demand.

On the other hand, the European Central Bank’s (ECB) steady rate of 3.0% has strengthened the euro, tempering gold’s rise in European markets.

Central Banks Drive Gold Prices Higher
Goldman Sachs forecasts an additional 8% rise in gold prices, expecting gold to hit $3,100 per ounce by the end of 2025. Much of this support stems from robust central bank demand, following past economic instability such as the freezing of Russian central bank assets in 2022.

Gold Market Volatility and Forecast

Gold’s Current Volatility Levels
Gold has showcased significant volatility in 2025, with its volatility index standing at 2