The news of Trump’s escalation in the tariff war has led investors to increase their focus on gold stocks, as these are seen as a safe haven in uncertain times. Uncertainties arising from trade conflicts and geopolitical tensions are driving demand for gold and thus also for gold stocks, which supports their prices and keeps them in rally mode.
Reasons for the Rally in Gold Stocks
- Gold as a Safe Haven: In times of political and economic uncertainty, investors seek refuge in precious metals like gold. Recent escalations in the tariff war have fueled fears of economic upheaval, thereby increasing the appeal of gold.
- Strong Demand from China: China is continuously increasing its gold reserves – in the first quarter of 2025 alone, the sale of gold bars and coins rose by 30 percent compared to the previous year. This demonstrates China’s effort to become less dependent on the US dollar and diversify its currency reserves.
- Global Central Bank Purchases: Besides China, BRICS countries and possibly US authorities are also buying large quantities of gold, further stabilizing or driving up the price. These purchases are difficult to predict but contribute to the positive sentiment towards precious metal stocks.
- Shift in Price Setting: The global power shift is also reflected in the gold market: price setting is increasingly shifting from New York and London to Shanghai – a sign of Asia’s growing influence on the commodity market.
Current Market Development
The gold price recently reached peaks around 3,500 USD per ounce (2025), after having risen significantly since 2019 due to pandemic, war, and trade crises (up about 72 percent since 2019). In 2024, the average price was still around 2,395 USD per ounce; this year alone, the price could increase by about 30 percent. Concurrently, the stock prices of mining companies are showing stable to positive development under these circumstances.
Conclusion
Trump’s whims in the tariff war act as a catalyst for increased demand for safe assets like gold stocks. Given global uncertainties and strategic purchases by large states, these stocks remain attractive to investors, supporting their prices and keeping them in rally mode.
This development underscores the role of precious metals as a crisis currency in a volatile political environment, with Asia’s significance in the global market on the rise.