Market Volatility: Gold Prices Soar to New Records as Stocks Flounder in Turbulent Economy of 2025
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Gold Prices Reach New All-Time High
As the saying goes, “What goes up must come down,” but if you’ve been checking out the price of gold lately, you might think this axiom doesn’t apply to the precious metal. On Wednesday, spot gold hit another all-time high, reaching $3,061.60 per ounce before dropping slightly to settle at $3,057.50 by the end of the trading day. Over the past year, gold prices have shot up by roughly 40% — a remarkable rally that (for the moment, at least) shows no signs of slowing down. Just since the start of 2025, it has risen nearly 15%.
Experts Stunned by Gold’s Meteoric Rise
As recently as January, experts predicted that gold might reach the symbolically significant threshold of $3,000 an ounce by the end of the year. In reality, it only took until March 14 to hit that benchmark. It’s continued to tick upward in the days since.
Gold Grinds Higher on Elevated Uncertainty
“Gold is grinding higher on elevated uncertainty,” metals trader Tai Wong told Reuters.
What’s Propelling Gold to New Heights?
What’s propelling the yellow metal to each fresh new record it notches?
Uncertainty Drives Gold’s Meteoric Rise
In a word, uncertainty. With the Trump administration’s trade policy changing seemingly by the hour, stubbornly persistent inflation and concern that tapped-out — and freaked-out — Americans are keeping their wallets closed, investors are facing a perfect storm of economic uncertainty. In their hunting for a safe harbor, it seems many are turning to gold, perhaps the oldest and most enduring safe-haven asset.
Gold: A Haven From Volatility and Inflation
Gold also is often held as a hedge against inflation, another contributor to its current popularity. While inflation has certainly cooled from the 9.1% peak rate it hit in June 2022, it remains higher than officials — not to mention ordinary consumers — like to see. What’s more, policymakers just sent their clearest signal yet to the market that they expect inflation to remain uncomfortably high through 2025. On Wednesday, the Federal Reserve’s rate-setting committee released its quarterly economic projections, which showed that officials now expect so-called core inflation to increase at an annualized rate of 2.8%. That’s up from a projection of 2.5% officials released just three months ago and nearly a full percentage point higher than the central bank’s 2% target.
Trump’s Trade Wars Take Gold Higher
Trump’s trade wars take gold higher. If “uncertainty” is the word that best sums up the engine powering gold’s recent rise, the second-most-important word of explanation would be one that’s been in a lot of headlines lately: tariffs. Aggressively protectionist trade policies being pursued vigorously, and sometimes chaotically, by the Trump administration are driving much of the gloomier outlook around inflation and economic activity.
Tariffs and Reciprocal Tariffs
In addition to raising steel and aluminum tariffs to 25%, raising tariffs on Chinese imports and levying 25% tariffs on Canadian and Mexican imports (with some exceptions), President Donald Trump and White House officials have announced a new raft of trade sanctions, unprecedented in size and complexity, currently scheduled to take effect April 2. These “reciprocal tariffs” would attempt to capture not just what tariffs other countries levy on U.S. imports, but a host of other policies the administration claims hurt the U.S.
Gold and the Dollar: A Love-Hate Relationship
Gold also is often held as a hedge against inflation, another contributor to its current popularity. While inflation has certainly cooled from the 9.1% peak rate it hit in June 2022, it remains higher than officials — not to mention ordinary consumers — like to see. What’s more, policymakers just sent their clearest signal yet to the market that they expect inflation to remain uncomfortably high through 2025. On Wednesday, the Federal Reserve’s rate-setting committee released its quarterly economic projections, which showed that officials now expect so-called core inflation to increase at an annualized rate of 2.8%. That’s up from a projection of 2.5% officials released just three months ago and nearly a full percentage point higher than the central bank’s 2% target.
