Gold Breaches $4,000 as Trump’s Tariff Threat Fuels Safe-Haven Rush
Bullion posts eighth straight weekly gain; silver soars 70% this year amid trade war fears, US political uncertainty and central bank buying frenzy
- Gold's price surged above $4,000 per ounce following President Trump's threat to impose new large-scale tariffs on Chinese goods.
- The announcement, made on social media, prompted investors to seek "safe-haven" assets, driving up the demand for gold.
- The price rally was also supported by a weakening of the US dollar, which was a direct result of the renewed trade war fears.
The price of gold surged back above the $4,000 per ounce level on Friday, putting the precious metal on track for an eighth consecutive weekly gain, after US President Donald Trump revived fears of a major trade war with China.
The President’s warning of large-scale import tariffs on Chinese goods, posted on Truth Social, sent investors scrambling for safe-haven assets.
According to Reuters, Spot Gold climbed 0.8 per cent to $4,007.39 per ounce at 15:18 GMT, capping a weekly increase of 3.2 per cent. US Gold Futures for December delivery rose 1.3 per cent to $4,024.40.
Bullion, which offers no interest yield and hit a record high of $4,059.05 on Wednesday, is widely considered the ultimate hedge against broad uncertainty.
The sharp rally was triggered by geopolitical risks, strong central bank purchasing, inflows from exchange-traded funds (ETFs), expectations of US interest rate cuts, and now, economic instability stemming from renewed tariff measures.
President Trump stated on Friday that there was "no reason" to meet with Chinese President Xi Jinping in South Korea as planned. His social media post triggered a sharp drop in equity markets within minutes, propelling gold past the $4,000 threshold.
"The re-heating of the trade war will weaken the dollar and is positive for safe-haven assets," commented Tai Wong, an independent metals trader.
Markets are also keeping a close eye on instability abroad, including the risk of a French government collapse, and the ongoing US government shutdown.
Silver Outpaces Gold
Investors widely anticipate the US Federal Reserve (the Fed) will implement rate cuts of 0.25 per cent in both October and December.
While short-term risks of a correction exist due to the rapid price appreciation, Hamad Hussain, a climate and commodities economist at Capital Economics, predicted: "Over the next few years, gold prices are likely to climb higher."
The rally was further supported by a 0.6 per cent weakening of the US dollar, which makes dollar-priced bullion more affordable for international buyers.
Silver is capitalising on the same driving factors as gold, alongside concerns over supply shortages and growing physical demand.
The metal jumped 2.2 per cent to $50.21 per ounce and has seen a staggering 70 per cent price increase this year alone.
The December 2025 contract for COMEX silver futures was trading at $48.03.
"The backwardation status of silver is a clear sign. Real market demand is crushing paper market supply," said Alex Ebkarian, COO of Allegiance Gold.
Backwardation—where the spot price is higher than the futures price—is typically a signal of immediate physical demand outstripping future speculation, making it "very possible for silver to break and hold above $50," Ebkarian added.
