Gold Hits New Peak as Trump's Auto Tariffs Bring More Gains

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The stock market remains largely unchanged following President Donald Trump’s most recent round of tariffs. In contrast, gold prices are shining brightly.

Trump’s declaration of a 25% tariff on imported cars and automotive components is thrilling news for the metals market. On Thursday, gold values surged by 1.5%, adding $46 to reach $3,069 per ounce. This jump positions gold close to achieving record-breaking levels and marks its biggest single-day increase in price since March 18th.

The S&P 500, having dropped approximately 1.1% on Wednesday before the statement was released, remained steady.

Investors are concerned that the new tariffs might adversely affect the weakening U.S. economy and introduce additional geopolitical instability by straining relationships with trade allies. particularly those located in Europe and Asia , who might choose to seek revenge.

The market’s anxiety is good news for gold, the classic investment haven, which was in a historic run-up Prior to Trump initiating trade tariffs, gold experienced a significant surge of over 15% in 2025. This came after an impressive performance in 2024 when it delivered almost a 27% return, outpacing the S&P 500.

Gold has experienced a resurgence due to increased interest in the commodity," noted David Morrison, senior market analyst at Trade Nation, in his report on Thursday. "Purchasers continue to show up since gold remains consistently above $3000. Investor concerns regarding Trump’s tariffs have led them to boost their holdings.

The influx into gold ETFs reveals the narrative. According to FactSet figures, investors have injected over $6 billion into these funds within this month and more than $11 billion throughout 2025. This contrasts sharply with only $1.6 billion in inflows during 2024 as gold experienced consistent increases then.

A declining US dollar has added another obstacle for gold. As gold prices are quoted in dollars, a weaker currency makes gold cheaper for international purchasers. On Thursday, the dollar dropped by 0.3% against a mix of major foreign currencies, bringing its decline so far this year to 2.8%.

Some believe gold has the potential to rise. all the way to $4,000 That was the main argument presented in a recent report by Bloomberg Intelligence commodities analyst Mike McGlone. He pointed out that gold typically performs well as investors divest from risky assets. Considering that stock prices and erratic cryptocurrencies remain unusually elevated, gold could potentially see further gains.

Certainly, despite the promising prospects for gold with key pricing factors continuing to support it, investors ought to exercise caution when considering entering an asset class that has reached over 50 all-time high points within the last year, much like gold has done.

"The current trend in gold continues to be strongly bullish; however, due to substantial year-to-date increases, futures contracts could still experience potentially severe profit-taking retracements," noted Tom Essaye, writer of the market analysis letter Sevens Report, on Thursday.

Send your letter to Ian Salisbury. ian.salisbury@barrons.com

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