(NewsNation) — Gold prices hit an all-time high this week as investors braced for economic turmoil fueled by President Donald Trump’s trade war.
On Monday, the going price for New York spot gold hit a record $3,122.80 per troy ounce. That’s about 40% higher than a year ago.
While the stock market has struggled, gold just posted its strongest quarter since 1986, partly due to fears around Trump’s tariffs, which have triggered instability.
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“Uncertainty is one of the main factors that has led to a renewed interest in gold,” Krishan Gopaul, senior analyst at the World Gold Council, told the Financial Times.
Demand for gold can rise sharply in times of chaos as investors flock to safe-haven assets. Trump unveiled new tariffs Wednesday, which he dubbed “Liberation Day.” The announcement sent stocks lower in after-hours trading, but gold futures were up, according to The Wall Street Journal.
Last week, Goldman Sachs raised its gold price forecast to $3,300 per ounce by year-end, up from $3,100. Bank of America also raised its gold forecast recently.
Why is the price of gold surging?
Americans are growing more anxious about the economy, and gold has benefited. The precious metal is traditionally viewed as a safe haven during turbulent times, especially as a hedge against inflation.
Michael Widmer, head of metals research at Bank of America, told NPR the recent gold surge has been “almost exclusively driven” by tariffs-related fears and uncertainty.
Consumer confidence recently fell to its lowest level since January 2021, and rising inflation expectations are one of the reasons why.
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Earlier this month, Federal Reserve Chair Jerome Powell warned that the arrival of “tariff inflation” could delay progress in the central bank’s fight against rising prices. That concern has helped fuel the recent gold frenzy.
Investors aren’t just buying up gold bars; they’re pouring money into gold exchange-traded funds (ETFs), which are linked to the price of gold. Those ETFs allow people to invest in gold without physically owning it.
According to the World Gold Council, $6.8 billion flowed into North American gold ETFs in February, the largest single-month inflow for the region since July 2020.
More broadly, gold’s strength in recent years has been driven by higher-than-expected demand from central banks, which have been increasing their reserves since the freezing of Russian assets in 2022, Goldman Sachs noted in a recent report.
Is gold a good investment?
Gold is a popular investment — even Costco sells it — but that doesn’t mean it’s risk-free.
For one, there’s no guarantee that gold prices will keep rising.
“Gold and other precious metals are highly volatile and past performance is not a good predictor of future returns,” the Commodity Futures Trade Commission (CFTC) warns.
The CFTC, which regulates the U.S. derivatives markets, points out that when economic anxiety and price instability are high, “the people who typically profit from precious metals are the sellers.”
The renewed interest in gold also has the attention of scammers, who are targeting seniors with elaborate gold schemes, according to the FBI.
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Something else to consider: Unlike stocks or bonds, gold doesn’t pay any dividends or interest, so it doesn’t generate ongoing returns. The only way to make money is to buy some and then hope to sell it when the price goes up.
That said, gold can be a good way to diversify your portfolio since it often responds to economic conditions differently than stocks.
The price of spot gold is up about 19% since the start of 2025, per the data firm FactSet. Meanwhile, the stock market has tumbled. The benchmark S&P 500 was down more than 3% year-to-date as of Wednesday afternoon.
However, historical data shows that stocks have generally outperformed gold over the long run
The Associated Press contributed to this report.
