We have seen gold reach record highs of over £2,342 ($3,080) this week as President Trump reveals more tariffs, driving investors to the precious metal safe-haven.
Gold has continued to build over the last year as a result of many factors including geopolitical and economic uncertainties and it looks like these will continue for a significant time.
So what does this mean for gold in the long run and will the momentum continue as we progress through the year?
Rick Kanda, Managing Director at The Gold Bullion Company has shared insights into what is happening and spoken on what he believes is in store for gold throughout 2025.
“President Trump’s tariff war is evidently causing economic uncertainty, which is, in turn, concerning buyers. Buyers from the United States are opting to move their holdings overseas, which is creating obstacles and rising gold prices. Buyers are worried about the gold shortages this might cause; however, movements of holdings between banks are just organised relocation of vaulted gold, and buyers shouldn’t view this as an actual supply crisis.
The leading cause of this shift in gold holdings is an increase in demand for physical gold rather than cash. In the past, certain gold investments, like ETFs, where you invest in gold but don’t actually own the physical product, were usually settled in cash.
However, the shift in buyers wanting their physical gold and not cash has added pressure and logistical challenges to physical supply, leading to price increases. Trump’s tariff war has caused economic uncertainty, making gold more attractive than cash in the eyes of investors.”
Rick continues, sharing his expert predictions for the precious metal throughout 2025, “We are now seeing forecasts of the precious metal reaching $3,500 by the end of the week and looking at its increased rises throughout this year, I fully expect this will be the case.
As we move further into 2025, gold will continue to see significant increases, especially if economic instability continues, as this will encourage central banks to keep at it with their aggressive gold-buying strategies. This behaviour from the banks is ultimately pushing gold prices even higher.
Trump’s tariff war is expected to keep gold in high demand. In the past, gold has been a reliable investment option and safe-haven asset in times of market unpredictability, and by the looks of things, 2025 is going to be another year of just that. To sum up, all indications suggest that gold will have another record-breaking year, which gold investors should be happy about as this confirms its value.”