Gold Surges as Investors Seek Safety
Gold is once again proving its power as the ultimate safe haven. As markets face growing turmoil, gold has surged past $3,200 an ounce, briefly hitting a record high of $3,243 before stabilizing. This marks a 6% gain in just one week, reinforcing gold’s status as a critical asset in uncertain times. But what’s fueling this rally—and why do experts think there’s still more room to run?1
The Push Toward Gold
One of the primary catalysts for the recent gold rally is the escalating trade war between the U.S. and China. China recently raised tariffs on U.S. imports to 125%, in direct response to U.S. tariffs. As it stands, each country is now imposing over 100% tariffs on the other’s goods.
The impact on markets has been swift and dramatic. A headline from Dow Jones Newswires summed it up: “The U.S. and China are going to economic war—and everyone will suffer.”2
These changes are raising worries about a recession. Investors are now rushing to find safety, which they usually find in U.S. Treasuries and the dollar. But this time, something different is happening.
Traditional Safe Havens Aren’t So Safe Anymore
Normally, rising market fear sends money flowing into Treasury debt and the U.S. dollar. But not now.
As the Wall Street Journal observed: “Normally when investors are this scared they seek safety, and nothing is safer than the U.S. dollar and Treasury debt. But despite mounting fear of recession, the usual flight to safety hasn’t materialized.”3
This is a critical shift. If confidence in the U.S. Treasury market falls, the global financial system will pay a heavy price.
Gold Defies Inflation Trends
In March, inflation dipped slightly—yet gold kept rising. That’s unusual. Typically, when inflation eases, gold prices fall. This time, investors are not just focused on the short-term dip. They expect tariffs to raise inflation in the future.
Meanwhile, the U.S. dollar has weakened against other major currencies. Making gold, priced in dollars, cheaper for overseas buyers. Which only adds more fuel to demand.
Central Banks and Rate Expectations
Gold is also getting strong support from other economic forces. Central banks continue their buying spree. Meanwhile, the Federal Reserve is expected to resume rate cuts in June. Analysts are forecasting 90 basis points in cuts by the end of 2025. Lower interest rates make non-yielding assets like gold more attractive.
Global Demand Is Surging
According to World Gold Council (WGC) research, slower U.S. growth and higher inflation is pushing investors into gold in a big way. Their data shows a significant increase in gold-backed exchange traded fund (ETF) inflows across all major regions.
North American funds account for 61% of total inflows, but Europe and Asia are rapidly catching up. The WGC highlighted that: “China and Japan dominated demand in March, both likely driven by rocketing gold price performances, which dwarfed other assets in the month, and roaring global trade policy risks.”4
In total, 92 tons of gold, worth $8.6 billion, flowed into global ETFs last month alone. In Q1, that number hit 226 tons, valued at $21 billion. Making it the second-highest quarterly level in dollar terms, second only to Q2 of 2020.5
This Rally Has Real Momentum
The WGC is confident this surge isn’t a fluke. They explained, “While there are headwinds that the gold market will naturally face in this environment, our analysis also suggests that current macroeconomic conditions are quite different from prior periods when the gold market reached previous highs.”
They added, “The willingness to hold and reluctance to sell – given current extreme policy uncertainty – could generate real momentum. And comparing the current rally to the recent 2011 and 2020 peaks highlights that, relatively speaking, fundamentals look more solid.”6
UBS: The Case for Gold
Investment strategists at UBS agree with the bullish outlook. “The case for adding gold allocations has become more compelling than ever in this environment of escalating tariff uncertainty, weaker growth, higher inflation and lingering geopolitical risks.”7
UBS expects gold to continue climbing into 2026, eventually settling at elevated levels. They see demand coming from all corners. The official sector, long-term asset managers, macro funds are buying gold. As is private wealth and retail investors.
They also point out that current gold holdings are comparable to levels seen during the COVID-19 pandemic. Yet they’re still below post-2008 crisis levels, leaving room for more growth.
On the supply side, things are tightening. Mine supply growth is limited, and scrap supply is restrained because, simply put, no one wants to sell. When rising demand meets shrinking supply, prices often spike.
The Start of Gold’s Next Supercycle?
According to FXStreet, gold’s current performance points to something even bigger. Analysts at the site believe this marks the beginning of the fifth cycle in gold’s ongoing super price structure. They predict a supercycle target of $3,328 with support at $3,192 if prices temporarily retreat.8
Gold is still doing better than 10 major assets. This shows its strength in the current, shaky financial climate.
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Conclusion
The signals are clear: gold is going up, while stocks and bonds are under pressure. For investors relying on traditional 60/40 portfolios, this shift could be a wake-up call.
Now is the time to consider diversifying your portfolio. A Gold IRA from American Hartford can help safeguard your financial future. Call us today at 800-462-0071 and speak with a precious metals specialist about how you can add the security of gold to your retirement plan.
Notes
1. https://www.cnbc.com/2025/04/11/gold-bolts-past-3200-on-dollar-slide-safe-haven-flows.html
2. https://www.kitco.com/news/article/2025-04-11/gold-price-powers-record-peak-safe-haven-demand-still-strong
3. https://www.kitco.com/news/article/2025-04-11/gold-price-powers-record-peak-safe-haven-demand-still-strong
4. https://www.kitco.com/news/article/2025-04-10/gold-demand-surges-amid-economic-uncertainty-world-gold-council-reports
5. https://www.kitco.com/news/article/2025-04-10/gold-demand-surges-amid-economic-uncertainty-world-gold-council-reports
6. https://www.kitco.com/news/article/2025-04-10/gold-demand-surges-amid-economic-uncertainty-world-gold-council-reports
7. https://www.investing.com/news/commodities-news/ubs-forecasts-3500-gold-price-in-2025-rally-to-extend-into-2026-3980795
8. https://www.fxstreet.com/analysis/gold-breaks-into-fifth-super-cycle-as-dollar-collapses-below-100-what-traders-need-to-know-now-202504111322
9. https://www.marketscreener.com/news/latest/At-3200-per-ounce-gold-will-crush-competition-in-2025-49599952/
