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| Stock image of gold bars. Doug Armand/Getty Images |
Gold’s glittering run in 2025 shows no signs of losing its shine. On Friday morning, the precious metal climbed to yet another all-time high, briefly touching $3,534 per ounce before easing slightly. At its peak, gold prices were up an eye-catching 32% since the start of the year a performance that has left the S&P 500’s 8% year-to-date gain far behind.
Analysts say three major forces are fueling this latest leg of the rally: unexpected tariff news, heightened geopolitical tensions, and fresh concerns about the US economy.
1. Tariffs on Gold Bars Take Markets by Surprise
The most immediate spark came from Washington. On Thursday, the Financial Times reported that the US government will apply tariffs to certain gold bars, citing documents reviewed from the Customs and Border Protection agency.
A ruling letter dated July 31 classified one-kilo and 100-ounce gold bars under a customs code subjecting them to import levies. That means gold bars could face the 39% tariff imposed on goods from Switzerland one of the world’s largest producers of refined gold bars.
This news caught markets off guard. Traders had assumed gold bars would be exempt under earlier tariff announcements. In his initial “Liberation Day” speech, President Trump’s team had specified that “non-monetary gold, unwrought, in the form of bullion and dore” would not be subject to duties.
Helen Amos, a commodities analyst at BMO, said the ruling contradicted earlier expectations. Paul Donovan, chief economist at UBS, went further, noting that US citizens who had purchased gold bars as a hedge against inflation could now face hefty taxes on that very hedge. According to Donovan, the ruling implies gold imported between April 9 and August 7 may already have been subject to tariffs.
The White House, in a statement to local press, said an executive order would be issued soon to “clarify misinformation about the tariffing of gold bars and other specialty products.” Until then, uncertainty is likely to keep rippling through the market.
2. Rising Geopolitical Tensions
Beyond trade policy, geopolitical risks are adding fuel to gold’s rally. Samer Hasn, senior market analyst at XS.com, said investors are watching a tense mix of diplomacy and threats unfold between the US, Russia, China, and other major economies.
President Trump has been pushing to broker a peace deal between Russia and Ukraine, but his approach has involved imposing steep tariffs on some of Russia’s key trading partners, including India, and warning of secondary sanctions if a ceasefire isn’t reached by Friday.
China another crucial Russian ally has yet to finalize a trade agreement with the US, despite an August 12 deadline that could trigger even higher tariffs.
“If negotiations with China and India falter, and no ceasefire in Ukraine materializes, geopolitical tensions could escalate beyond tariff threats alone,” Hasn wrote. “Such an outcome would renew the risk premium on safe-haven assets and gold would be the biggest beneficiary.”
3. Worries About the US Economy
The third driver is closer to home: a creeping unease about the underlying health of the US economy. While second-quarter GDP growth was strong, recent data has revealed weakness in the job market.
The July jobs report showed fewer-than-expected hires, and job growth for May and June was revised sharply lower. At the same time, several inflation measures have ticked higher, raising the specter of stagflation a scenario where high inflation and slowing growth occur together, leaving policymakers with few good options.
Stagflation is notoriously hard to combat because the Federal Reserve can’t cut interest rates without risking even higher prices. That policy bind is one reason investors are leaning more heavily on gold as a long-term store of value.
“Even conservative platforms are increasingly voicing concern about long-term consequences and the false sense of optimism some economic figures may convey,” Hasn noted. “Lingering concerns among investors are likely to continue supporting gold’s momentum.”
Analysts See More Upside Ahead
With tariffs, geopolitics, and economic uncertainty all in play, many Wall Street forecasters remain bullish on gold’s trajectory. In April, Goldman Sachs lifted its year-end price target to $3,700, suggesting a 6% upside from current levels.
Market veteran Ed Yardeni, president of Yardeni Research, is even more optimistic, projecting gold could climb to $4,000 by the end of 2025, a further 14% gain.
For now, the message from the markets is clear: in an era of policy shocks, global tension, and fragile economic confidence, gold remains the ultimate safe-haven asset and its shine is getting brighter.
