Precious Metals

Why Trump’s Tariffs Could Be Good News for Gold Investors

Ruby Layram 3rd Apr 2025 No Comments

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If you’ve been keeping an eye on the news, you’ve probably noticed that gold prices are making headlines, soaring to record highs. What’s driving this surge? A significant factor is President Trump’s recent tariff announcements.

In this post, we will explain the relationship between Trump’s Tariffs and the price of Gold, looking at whether or not the precious metal will continue to soar. Keep reading to find out why Trump’s Tariffs could be good news for Gold investors.

The Connection Between Tariffs and Gold Prices

First off, let’s talk about why tariffs impact gold prices.

When a government imposes tariffs, it often leads to increased costs for imported goods. This can cause inflation and slow down economic growth. It can also cause tensions between trade partners- even sparking rumors of trade wars!

In such uncertain times, investors tend to seek safe-haven assets to protect their wealth, and gold has traditionally been one of the top choices.

In simple terms: the introduction of tariffs leads to uncertainty, which encourages more people to buy Gold, pushing the price up.

Recent Tariffs and Their Impact on Gold

The best way to understand the relationship between Tariffs and Gold is to look at how recent Tariffs have influenced the price.

Recently, President Trump announced a 25% tariff on imported vehicles and auto parts, along with an additional 10% on all imports from China.

These moves have sparked fears of a full-blown trade war, leading investors to flock to gold as a protective measure. As a result, gold prices have surged to record highs, exceeding $3,100 per ounce.

Why Gold Is Attracting Investors Now

Several factors are making gold particularly attractive in the current climate:

Gold is a Safe Haven

With the uncertainty surrounding trade policies and potential retaliatory measures from other countries, gold’s status as a safe-haven asset is more pronounced. Investors are turning to gold to hedge against potential economic downturns.

Also read: Cash ISAs vs Gold: Which is a Better Safe Haven For Your Money?

Tariffs Can Spark Inflation

Tariffs can force companies to increase the price of imported goods, leading to higher prices for consumers. This can contribute to inflation- where the purchasing power of cash goes down!

Gold is often seen as a hedge against inflation, preserving purchasing power when cash may be losing value.

If inflation starts to rise, more people might turn to Gold.

Just last night (02/03/2025), Trump announced 10% Tariffs on goods imported from the UK, sparking uncertainty amongst UK investors.

Market Volatility

The stock market has experienced increased volatility due to trade tensions. During such times, gold often performs well as investors seek stability.

Gold operates in a different market than stocks and shares. Therefore, it is not prone to the same volatility. When the stock market is uncertain, investors might sell their investments for Gold until the water settles and they can make more confident decisions.

Potential Upsides for Gold Investors

For those of us considering or already invested in gold, these developments could be significantly beneficial.

Price appreciation: As demand for gold increases in response to economic uncertainties, its price is likely to continue rising, potentially leading to significant gains for investors.
Portfolio diversification: Adding gold to an investment portfolio can provide diversification benefits, reducing overall risk, especially during times of economic instability.
Liquidity: Gold is a highly liquid asset, meaning it can be quickly converted to cash if needed, providing flexibility for investors.

Things to Consider Before You Invest

While the current environment presents opportunities, it’s essential to approach gold as an investment thoughtfully:

Market timing: Gold prices can be volatile. It’s crucial to consider how long you plan on holding your investment and not attempt to time the market perfectly.
Storage and insurance: Physical gold requires secure storage and insurance, which can add to the cost of investment. Gold coins might be a more convenient option here.
Alternative investments: Consider gold-related investments like exchange-traded funds (ETFs) or mining stocks, which can offer exposure without the need to hold physical gold.

President Trump’s tariffs have introduced a wave of economic uncertainty, prompting investors to seek refuge in gold. This surge in demand has driven prices to record highs, presenting potential opportunities for investors.

However, it’s vital to conduct thorough research and consider your financial goals and risk tolerance before making investment decisions.

Remember, while gold can be a valuable addition to a diversified portfolio, it’s just one piece of the puzzle in achieving long-term financial success.

Next Steps

If you’re keen to protect the value of your cash by investing in Gold, it is wise to go through a trusted broker such as Bullion Club. This way, you know that the Gold that you’re getting is legit!

Bullion Club offers a personalized service to help you build the most suitable portfolio for your investment goals. This is a great way to make sure that you’re making the right decision.

Keen to learn more about investing? If so, why not sign up for our fortnightly MoneyMagpie Investing Newsletter? It’s free and you can unsubscribe at any time.

Disclaimer: When investing your capital is at risk. Remember, the value of any investment can both rise and fall. Always do your own research.

MoneyMagpie is not a licensed financial advisor. Information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.