Is It Still Worth Chasing Safe-Haven Gold at All-Times Highs? (AI Translation)

【周刊提前读】避险理由都在 黄金还能追高么？

Summary:

Amid escalating U.S. tariff policies under President Donald Trump, global markets have experienced heightened volatility, particularly in the gold sector, which is traditionally seen as a safe-haven asset. However, gold prices themselves have swung sharply, initially surging after tariff announcements in April 2025 but then falling quickly below the $3,000-per-ounce mark, erasing a month’s gains in just a few sessions. Notably, a rapid rebound followed, and by mid-April, both New York and London gold prices soared to new historic highs above $3,300 per ounce before adjusting downward after statements from Trump about potential tariff negotiations [para. 1][para. 2][para. 3].

Market analysts point out that gold typically recovers within one to two weeks following sharp declines. The current trajectory of gold prices is heavily influenced by expectations regarding U.S. Federal Reserve policy, especially with recession fears growing and financial market turbulence raising forecasts for further rate cuts. Should the Fed resume easing and real interest rates fall, gold could see continued support. Also, the use of tariffs as a geopolitical lever has shaken global confidence in the dollar and accelerated moves toward “de-dollarization,” with central banks and institutions diversifying away from U.S. dollar assets [para. 4][para. 5].

Trump’s implementation of “reciprocal tariffs” in early April 2025, ranging from 10% to 97% on various partners (and 34% on China), caused wide financial chaos. Global stock markets suffered their steepest drop since the onset of COVID-19, and, unusually, gold also declined as investors scrambled to raise cash, recalling similar sell-offs experienced during the 2020 pandemic crash. However, as market confidence returned and the dollar weakened, gold quickly regained lost ground, outperforming most other asset classes [para. 6][para. 7][para. 8][para. 9].

Gold demand remains robust, with international prices having risen about 26% since the start of 2025, supported by both central bank purchases and investment fund inflows. In 2024, global demand approached 5,000 tons, with central bank gold reserves and ETF inflows both reaching multi-year highs. Emerging market central banks are especially active, with China increasing reserves by 331.2 tons and Turkey by 220.8 tons from 2022 to 2024. In contrast, developed nations’ gold reserves have been stable, with the U.S. holding around 8,133.5 tons—the largest globally [para. 10][para. 11][para. 12][para. 13].

There’s debate over central bank motivations for boosting gold holdings, largely driven by diminishing trust in the dollar following repeated U.S. tariff and sanction policies. Meanwhile, experts differ on gold’s absolute necessity for currency credibility, noting that the U.S. dollar’s dominance remains anchored in economic power and global reserve status [para. 14][para. 15][para. 16][para. 17].

Financial institutions recently raised gold’s target prices, with Goldman Sachs forecasting $3,700 per ounce by end-2025, though skepticism remains about gold’s reliability as a hedge. While gold typically moves oppositely to the dollar and U.S. Treasury yields, recent phases showed temporary "decoupling" as risk aversion surged [para. 18][para. 19][para. 20][para. 21][para. 22].

For individuals, surging gold prices and expanded product access have fueled retail enthusiasm in China. While physical jewelry remains popular, lower-barrier financial products such as gold ETFs and bank-backed accumulation accounts are increasingly favored. However, these products carry medium to high risk classifications, leading banks to raise investment thresholds and warning about liquidity suspensions during volatile periods. Financial advisors urge caution, particularly with leveraged or futures-based gold products, stressing that gold’s long-term returns trail equities and are highly dependent on market timing or luck [para. 23][para. 24][para. 25][para. 26][para. 27].

In summary, gold remains a favored safe-haven amid global policy uncertainty, but its price behavior is subject to myriad factors including monetary, fiscal, and geopolitical developments. Individual investors are advised to understand risks and maintain prudent strategies, as gold’s performance, while strong in recent periods, is far from guaranteed in the long term [para. 28][para. 29].