Whenever investors pour their money into gold, it’s often because of economic uncertainty — and there’s a lot of that going around these days. Gold prices have reached record highs this month amid concerns of President Donald Trump’s plans to impose steep tariffs on imports, which could muddy the U.S. and global economic picture.
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Spot gold rose 1.2% to $2,932.79 an ounce as of midday Tuesday (Feb. 18) after hitting an all-time high of $2,942.70 the previous week, Reuters reported. Meanwhile, U.S. gold futures have also moved higher. This continued a months-long trend of rising gold prices that has accelerated since Trump was elected in November.
Gold could move even higher with Trump’s tariff plans still up in the air — which means it could be a good time to invest in the metal.
A Hedge Against Volatility
“We are seeing increased safe-haven demand due to the disrupted nature of the Trump administration, and we have also got a bullish chart posture,” Jim Wyckoff, senior market analyst at Kitco Metals, told Reuters.
Gold has also benefitted from the “complex interplay” of global economic factors, according to Paul Williams, managing director at Solomon Global.
“This is not a temporary spike or just a ‘Trump Bump,’ but a reflection of an uncertain geopolitical landscape and deep-rooted instability in the global economy,” Williams said in a press release. “The shifting world order is becoming increasingly volatile, making gold an enticing option for hedging risk and safeguarding wealth.”
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Tariff Turbulence
Over the near term, experts will keep an eye on how Trump proceeds with his tariffs. In early February, the president announced plans to impose 25% tariffs on imports from Canada and Mexico, along with an additional 10% tariff on Chinese imports. The news sent stock markets tumbling, the AP reported, and Trump quickly paused the Mexico/Canada tariffs for a month.
As Forbes noted, it’s “rare” for gold to rise so sharply during periods of economic strength — especially in the U.S. The reason it’s doing so now is directly tied to the Trump tariffs and the potential impact they could have on the global economy, experts noted.
“[Gold] clearly would benefit from universal tariffs,” said Fabio Bassi, JPMorgan’s head of cross asset strategy.
With so much uncertainty right now, here are three reasons it could be a good time to buy gold, according to CBS News:
- It serves as a hedge against inflation.
- It diversifies your portfolio so you are not overly dependent on stocks, bonds, real estate and other investments that could sink if tariffs create economic problems.
- Gold prices might not have peaked, which means if you buy now, you can benefit from future price hikes.
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This article originally appeared on GOBankingRates.com: Gold Hit a New High Amid Trump Financial Uncertainty — Is It Time To Buy?
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