After record price

Trump’s tariffs drive gold price higher and higher

Donald Trump's announcements to introduce further tariffs are causing investors to flee to the "safe haven of gold".(Bild: Krone KREATIV/AFP, YASSER AL-ZAYYAT / AFP / picturedesk.com)

The announcement of new US tariffs is already driving the price of gold to a new all-time high. And experts expect the price of the precious metal to rise even further. A year ago, an ounce only cost around 2000 dollars.

The price of gold has been trending upwards since mid-December. During this time, the value of the precious metal has risen by around 12 percent. The price of the precious metal also reached an all-time high in euro terms. At times, an ounce cost 2814.35 euros, the highest price ever.

US trade policy unsettles the markets
"The recent escalation of US trade policy is causing uncertainty on the markets," said precious metals trader Alexander Zumpfe from Heraeus, explaining the increased demand for gold as a "safe haven". US President Donald Trump announced at the weekend that he would impose tariffs of 25 per cent on steel and aluminum imports into the United States. Details are to be announced at the beginning of this week.

According to analyst Ricardo Evangelista from Luxembourg-based trading house Activtrades, demand for the precious metal is currently rising for two main reasons: Because of concerns about the potential impact of the new US administration's protectionist course on the global economy and on inflation in the US. Many investors see gold as a hedge against inflation.

Central banks increase gold reserves
Heraeus expert Zumpfe also sees "continued demand from central banks". Several central banks increased their gold reserves last year in order to become less dependent on the dollar as the world's reserve currency. Zumpfe points out that China's central bank increased its gold reserves again in January.

If geopolitical uncertainty persists and inflation expectations rise, the precious metal could continue its upward trend. "We believe a rise towards the psychologically important mark of 3,000 dollars per ounce is possible," said Zumpfe.