The escalation of the trade war between the USA and the European Union, along with the aggressive trade policy of US President Donald Trump, has led to a significant increase in the gold price, putting gold stocks into rally mode. Investors are increasingly seeking safe investment options like gold in the face of growing economic uncertainty.
Reasons for the Gold and Gold Stocks Rally
- Trade Policy Tensions: The tariff conflicts between the USA and the EU heighten market uncertainty, prompting investors to flee to safe havens like gold.
- Economic Warning Signs: Falling oil prices (by about 18% in 2025) combined with rising gold prices (+25% since the beginning of the year) suggest to experts a possible upcoming recession. This discrepancy intensifies interest in precious metals as a hedge against economic risks.
- Central Bank Purchases and Monetary Policy: The loose monetary policy of many central banks leads to high public debt in Europe and the USA, which in turn promotes the devaluation of currencies. This further drives demand for tangible assets like gold.
- Gold Price at Record Levels: The price for an ounce of gold exceeded $3,500 for the first time in April 2025, a historical peak. A record high was achieved in euros as well.
Impact on Gold Stocks
- The entire industry is currently in rally mode, with many values just at the beginning of an upward movement. Experts continue to see potential for rising prices among mining companies like Newmont Mining.
- The increased interest in physical gold is also reflected in a heightened attractiveness of stocks in the precious metal mining sector, as they often correlate with the price of the commodity.
Conclusion
The escalation of the trade war triggered by Trump’s trade policy whims, combined with other macroeconomic factors, has led to a significant increase in interest in safe investments like gold, and thus in respective stocks. This development could offer investors attractive opportunities, especially in the current market situation, as both the physical market and the stock markets surrounding the precious metal are likely to continue performing strongly.