The gold price has reached a historic $3,000 per ounce for the first time, as global economic uncertainty and trade tensions boost demand for the precious metal. On Friday, spot gold hit a record high of $3,004.86 per ounce, reflecting a 14% increase since the beginning of 2025.

Gold is considered a safe investment, often sought after during periods of economic instability. As the global trade war escalates, financial markets have become more volatile, creating concerns about its impact on economies and consumers worldwide.

The ongoing trade war, particularly between the US and its largest trading partners, has introduced tariffs, which are taxes on imports. These tariffs are raising fears of higher prices, prompting investors to turn to gold as a hedge against inflation.

When tariffs are applied, businesses face higher costs, which are often passed on to consumers in the form of increased prices. This leads to a rise in the cost of living, making gold a more attractive investment.

Last Thursday, US President Donald Trump threatened to impose a 200% tariff on European Union (EU) alcohol imports, further intensifying the trade conflict. This was in response to the EU’s 50% tax on US whiskey imports, a retaliation to Trump’s tariffs on steel and aluminum. Additionally, the US has raised tariffs on Chinese imports to at least 20%.

Suki Cooper, a precious metals analyst at Standard Chartered, noted, “In a backdrop of geopolitical uncertainty and ongoing tariff changes, demand for gold remains strong.” She highlighted several factors contributing to this demand, including continued gold purchases by central banks.

Gold prices have historically surged during times of economic crisis. For example, during the global financial crisis in 2007, gold became a popular safe haven asset, driving its price higher.

Russ Mould, investment director at AJ Bell, said we are witnessing an “era in which gold is really starting to shine.” Since dipping below $1,200 per ounce in late 2018, gold prices have steadily risen, spurred by factors like the Covid pandemic and increasing government deficits.

According to World Gold Council data, central banks added 1,045 tonnes of gold to their reserves last year, marking the third consecutive year of purchases exceeding 1,000 tonnes.

Mould pointed out that it’s difficult to pinpoint the single factor driving the current gold price surge, as the combination of Trump’s tariffs, inflation concerns, and central bank actions have all played a role in gold’s resurgence.

As the gold price continues to rise, it remains a key asset for investors seeking stability amid global economic challenges.