As U.S. President Donald Trump’s latest tariffs on Canada, Mexico, and China take effect this week, global trade tensions have reignited, plunging markets into a stark “split reality”: stock markets across the U.S., Europe, and Asia are collapsing, while safe-haven gold surges toward the $3,000 mark.
The week began with Trump announcing 25% tariffs on imports from Canada and Mexico, alongside extended tariffs on Chinese goods, formally thrusting the U.S. into a global trade war frontline. Analysts warn that the specter of trade conflict has erased all post-election gains in U.S. stocks, with fears of rising inflation and economic slowdown intensifying:
In sharp contrast, gold has emerged as the ultimate refuge. April gold futures in New York soared to $2,925.10 per ounce, reclaiming the $2,900 level after last week’s slump and inching closer to the $3,000 milestone. Ole Hansen, Saxo Bank’s head of commodity strategy, noted that gold’s correction was stunningly brief, with $3,000 now back insight—and even $3,300 possible.
Beyond trade war fears, gold’s rally is fueled by:
Canada, Mexico, and China have vowed retaliatory tariffs, threatening higher supply chain costs and renewed inflation. Hansen warned that trade wars could drive up import prices while stifling growth, amplifying gold’s dual appeal as an inflation hedge and safe haven. Markets fear the conflict could derail the fragile global recovery.
Currently, gold ETF investment demand has surged, but holdings (85.8 million ounces) remain 20% below the 2022 peak (107 million ounces), indicating there is still room for capital inflows. Hansen emphasized that when technical selling pressure is rapidly absorbed and speculative short positions remain hesitant, it signals the strongest setup for a prolonged bull run in gold.
Amidst the “trial by fire and ice” of this trade war, gold prices breaching the $3,000 mark may only be a matter of time.
