Will gold hit $4000 in 2025? That question is now echoing across global markets as rising geopolitical tensions and aggressive U.S. trade policies send shockwaves through the financial world.
Markets around the world are tumbling following a dramatic move by U.S. President Donald Trump, who has signed an executive order introducing a sweeping 10% tariff on all foreign imports starting April 5. This bold economic shift marks a significant escalation in global trade tensions and could reshape the financial landscape for the rest of the year.
Adding further strain, Trump’s administration will begin imposing retaliatory tariffs on April 9 against 60 countries accused of employing significant non-tariff trade barriers. While the new import duties are set at 10%, Trump emphasized that they are still lower than what he considers the “real” rates other nations apply through hidden mechanisms like currency manipulation and regulatory obstacles. Still, he has expressed a willingness to enter talks for mutual tariff reductions.
High-impact sectors such as automotive, steel, and aluminum will be hit with a lasting 25% tariff, maintaining the administration’s hardline approach in these key industries.
Top economists and strategists from JPMorgan, Bank of America, and Citigroup have raised red flags over the potential consequences. They caution that the higher import costs could fuel inflation, eroding purchasing power, and dampening consumer confidence. Rising prices especially for vehicles, parts, insurance, and maintenance might push the Federal Reserve into a difficult position. If inflation breaches its 2% target, the central bank may be unable to provide economic relief through rate cuts.
There’s growing concern that the surge in consumer prices could lead to reduced household spending and potentially trigger a slowdown later this year. Comparisons are already being made to inflationary conditions experienced during the COVID-19 pandemic.
In terms of revenue, the U.S. government expects to collect at least $300 billion annually from the new tariffs possibly as much as $600 billion if average rates climb closer to 20%.
Stock markets reacted swiftly to the tariff announcement. The S&P 500 plunged up to 4.5%, while the tech-heavy Nasdaq 100 tumbled 5%. Gold prices, represented by XAU/USD, initially slipped 1.2% after touching a new all-time high.
However, investment veteran Ed Yardeni sees a bullish path ahead for gold. He predicts the precious metal could surge to $4,000 per ounce before the year ends. “That could happen even faster if Trump continues his tariff crusade,” Yardeni remarked, suggesting that investor demand for safe-haven assets will only grow as trade tensions intensify.
