After hitting an all-time high in early April 2025, the price of gold has dipped. Gold made a 52-week high of $3,167 and currently trades around $3,107. While that’s not a big move, one would’ve expected Gold to continue rallying given all the uncertainty in the world.

So, what’s putting the brakes on the gold price? Selling pressure in gold could be primarily due to profit booking since there has been a significant run over the last 12 months. Gold is up by 35% over the last year.

But the sudden drop in gold price was witnessed after Trump’s April 2 tariff announcement. What could have led to that?

You see, while the tariffs were announced on April 2, some of them are to be implemented from April 5, while the reciprocal tariffs come into effect from April 9. The real impact will be felt much later as consumers, corporations, and governments respond to them. There is also time for negotiations, and Trump has signaled that he may be gentle on nations, demonstrating a genuine desire to decrease tariffs on US goods.

Gold acts as a haven asset in times of fear and uncertainty, making it a popular investment destination for most. During these uncertain periods, investors may opt to sell off assets where they are sitting on significant gains to raise cash to offset losses in other markets.

How will gold prices react to Trump tariffs?

Gold is projected to grow further, given the uncertain economic environment that the world is in now. The unstable economic environment and a bearish outlook on equities are expected to keep gold prices higher in 2025. After a wild run in 2024 that was mostly fueled by big central bank purchases and Federal Reserve monetary easing, the precious metal has risen around 20% this year.

Jon Mills, equity analyst for Morningstar, recently wrote on gold where he is supporting higher prices for gold. “Tailwinds include a flight to safety on falling share markets, tariff worries, geopolitical instability, a weaker US dollar, and rising inflation expectations. Central bank buying is strong and ETF flows are now positive,” says Mills.

In his report, Mills writes – “Based on the futures curve, we now assume gold averages $3,170 per ounce from 2025 to 2027, up from around $2,810. We also raise our assumed mid-cycle gold price to $2,000 per ounce from 2029, up from $1,820.”

It means, Mills has increased gold price forecasts from $1,820 to $2,000 per ounce from 2029 onwards. This is a positive outlook on gold. “Inflation has pushed up and steepened the gold industry cost curve in recent years, and this is likely to continue in the near term. Given high prices, miners are focused on maximizing production rather than cost control,” adds Mills.

How will gold move from here in the short term? Gold price could fall below $3,000 if selling pressure continues. “Gold active June contract has important support at $3,070 (~Rs 88,700). Until prices are trading above this level, we are likely to see a rebound up to $3,200(~Rs 91,000). But if prices sustain below $3,070, it can fall up to $3,000 (~Rs 87,000),” says Dr. Renisha Chainani, Head – Research at Augmont.

Also Read: Will the price of gold cross Rs 1 lakh in 2025?

Gold price today in India is also facing pressure. 24 carat gold price is down by Rs 1,740 to trade at Rs 91,640. The US Fed’s anticipated rate cut in May or June could potentially trigger a significant gold price push.

Also Read: 5 reasons why gold price is rallying