Trade wars and various economic crises lead to
the search for safe assets. Gold has typically played a haven role during such
periods, protecting investors from instability. However, given the intricacies
of the modern world and the changes in the global economy and financial markets
in 2025, the question arises: will gold retain its reputation as a
“haven” in today’s trade wars?
In 2018, when the trade war between the U.S.
and China began in July with duties on $34 billion worth of goods, gold
initially declined. This was amidst a general increase in risk and uncertainty
in the markets. However, as trade measures worsened and uncertainty in the
global economy increased, gold began rebounding.
The gold price rose to around $1300 per ounce
in 2018, confirming its role as a safe-haven asset in the face of trade
conflicts. Since then, gold has shown incredible growth.
However, it must be remembered that in 2018,
gold was not at the level of its historical highs.
Gold falls after tariffs 2018
However, by the end of Donald Trump’s first
term in 2021, gold had delivered impressive returns over the distance. Despite
initial fluctuations in 2018 due to the outbreak of the trade war, the metal
has strengthened its position as a haven asset over the longer term. Heightened
global economic risks, rising inflation expectations, and volatility in stock
markets have contributed to sustained demand for gold, making it one of the
most profitable instruments in investors’ portfolios over this period.
Strengthening gold’s position towards the end of Donald
Trump’s presidential term.
In 2025, investors became increasingly focused
on gold again in light of heightened trade wars and decreased global economic
confidence. Unlike in 2018, however, the conditions surrounding gold are less
clear-cut. In 2018, gold fell initially, but as the crisis progressed, it
zeroed throttle and grew aggressively. However, in the face of a global restart
of geopolitical conflicts and trade sanctions, gold is already gliding at
record highs and routinely achieving tops.
These dynamics carry respective questions and
risks. From the technical standpoint, gold’s prolonged growth and periodic
record tops may mean the market is overheating, and a corrective phase is
coming. In 2018, gold was merely tapping out the bottom and gaining momentum—
it is now coming from the occasion of aggressive growth, approaching new tops.
It is essential to develop further analysis leveraging this latest assessment
of gold.
Moreover, significant events that may
influence the gold price in 2025 are still happening right now – we’re still in
the equation for the provocative action of the respective significant economies
worldwide. It’s too early to claim that gold will be the primary haven asset
again. Financial markets have changed.
Gold right now
In the current environment, it is extremely
important to monitor gold’s behavior closely: its price dynamics, the level of
demand from institutional and retail investors, and attempts to update the
historical maximum. The asset is already close to record highs, and any
movement—up or down—may signal a change in market sentiment.
Will gold remain a defensive
asset during trade wars?
Gold has performed well in the 2018-2021 trade
war cycle. However, the current situation is far more complex and multifaceted.
Unlike 2018, when gold started from low levels, it is now near all-time highs,
raising valid concerns about market overheating and a likely correction.
The financial environment has changed: major
players can now utilize alternative instruments such as digital assets,
macroeconomic risks have intensified, and global politics have become even less
predictable. Trade conflicts continue to unfold, and gold’s final role in this
cycle is yet to be determined. Whether it will once again become the primary
protective asset is an open question. One thing is sure: closely monitoring the
gold price, demand, and market sentiment will be critical to making informed investment
decisions in the coming months.
