Gold continues to gain strength, maintaining its bullish trajectory amid uncertain economic and market conditions. Thanks to the global geopolitical risks, gold began to rise in late 2022 and has been on a bull run ever since.

However, there is one other reason for the gold price to keep rising in 2025.

Trump’s tariff announcement has brought about a heightened sense of uncertainty among the economies of the world. Today, the risk of recession has multiplied manyfold for various countries, starting with the USA.

Last week, gold created an all-time high record of $3,245, fueled by a surge in safe-haven buying amid a worsening trade conflict between the United States and China.

So far in 2025, gold has gained $600 per ounce, and the demand for the yellow metal doesn’t look to abate anytime soon. Gold was $2,623 on January 1, while on April 14, 2025, gold trade at $3,223, a gain of almost 23% in 3 months and 15 days.

In India, the cost of gold today is Rs 93,860. The 24-carat gold price on January 1, 2025, was Rs 78,000. In Indian Rupees, gold is up by 20.3% YTD.

In times of uncertainty and global risk, gold becomes the most sought-after asset class. And, this is what is keeping the gold price moving up.

From central banks, industries, to global exchange-traded funds, to investors, gold has become one of the most preferred asset classes over the last 2-3 years.

Many analysts believe that gold has run up a lot, and there could be bouts of profit-booking intermittently, with the long-term outlook remaining solid for the yellow metal.

Many analysts believe that gold has already risen significantly and that there may be periodic bouts of profit-taking, but the long-term view for the yellow metal is still positive.

Any new developments and news flow around the Trump tariff will keep the heat on for gold. Trade tensions looked to ease after President Donald Trump granted a tariff exemption on electronic products primarily imported from China. However, Commerce Secretary Howard Lutnick announced on Sunday that these commodities, along with semiconductors, will face new tariffs over the next two months, adding to doubt about the administration’s trade policies. Trump had hiked tariffs on Chinese goods to 145%, after which China retaliated and raised tariffs on US imports to 125%.

The tailwinds for gold continue with the US Fed FOMC scheduled next week. Any dovish outlook by Powell, especially after the recent downtrend seen in US CPI data, will be bullish for gold. But this might not happen. Powell’s unequivocal stance on inflation spiking again once tariffs get implemented could keep rates higher for longer. That’s a negative for the gold price to move up from current levels.

Still, a recessionary environment will add to the demand. A sell-off in the bond market also adds to the demand for gold as a safe-haven asset.

In trade wars, hardly any country emerges as a winner in the end. The damage to the US dollar is already to be seen with the US Dollar Index falling below 100 in 3 years. A weakness in the dollar is also positive for gold.

Also Read: 4 reasons gold hit an ‘all-time high’ overnight

“In this environment of rising tariff uncertainty, poorer growth, greater inflation, and persisting geopolitical threats, the case for increasing gold allocations has never been stronger. The evolving global trade, economic, and geopolitical landscape reinforces gold’s significance as a safer investment refuge,” says Dr. Renisha Chainani, Head – Research at Augmont.

While there are many reasons to believe that the gold price will find support at current levels, any change in their dynamics could be a dampener to the gold price for the rest of 2025.