Gold extended gains for a second straight session on Tuesday, rising 0.9% to $2,919.44 an ounce as investors sought safety amid escalating global trade tensions.
President Trump’s move to impose 25% tariffs on imports from Mexico and Canada, coupled with a doubling of duties on Chinese goods to 20%, prompted an immediate response from China that included additional tariffs and new export restrictions.
Analysts say the widening trade conflict has strengthened gold’s appeal as a defensive asset. BullionVault’s head of research described the situation as “Trump 2.0 delivering exactly the chaos he promised,” and noted that uncertainty has pushed both Western investors and emerging-market central banks toward gold as an all-weather hedge.
Year to date, gold has climbed roughly 10%, after reaching an intraday record high of $2,956.15 on February 24. Market participants point to geopolitical risks, tariff disputes and the potential for further policy escalation as key drivers behind the metal’s recent rally.
Investors typically turn to gold during periods of heightened uncertainty because it is seen as a store of value that is less vulnerable to currency swings and equity market volatility. Central banks in several emerging economies have also increased their holdings, citing the metal’s diversification benefits amid trade and geopolitical shocks.
While short-term price moves can reflect changing headlines and speculative flows, longer-term trends in gold are shaped by real rates, inflation expectations and global economic growth. If trade tensions persist or escalate further, analysts warn that demand for safe-haven assets like gold could remain elevated, supporting higher prices.