President Donald Trump’s tariffs despatched shares tumbling in current weeks, however the uncertainty helped propel a unique asset seen as a secure haven: gold.
The value of gold topped $3,000 per ounce for the primary time ever final week, and the dear steel continued to hover round that mark in early buying and selling on Monday.
Gold costs have soared 12% up to now this 12 months, whereas the S&P 500 has plummeted practically 7%. Over that interval, the Dow Jones Industrial Common has dropped 2% and the tech-heavy Nasdaq has tumbled 8.5%.
The frenzy towards gold makes monetary sense, specialists stated. The asset provides traders a hedge towards unsure inventory efficiency, since gold costs usually show a level of independence from actions in equities markets.
Nevertheless, gold costs carry volatility of their very own, some specialists added, particularly when patrons enter the market at a excessive level, risking losses as a substitute of offering a safety blanket.
“Traders must be cautious,” Campbell Harvey, a professor at Duke’s Fuqua College of Enterprise who research commodity costs, instructed ABC Information.
“At a time of heightened uncertainty, individuals look towards a secure haven – and gold is a perceived secure haven. However most individuals don’t notice that gold is risky,” Harvey added.
The run-up in gold costs comes amid a market hunch set off by an escalating international commerce battle.
Final week, the S&P 500 closed down greater than 10% since its excessive in February, that means the decline formally certified as a market correction. It marked the index’s first correction since October 2023. On the identical time, the Dow suffered its worst one-week drop-off since 2023.
“Proper now, it’s a really anxious market,” Jim Wyckoff, senior market analyst at Kitco Metals, instructed ABC Information. “That’s been a detriment for stock-market bulls and a increase for gold-market bulls.”
The flight to gold in moments of market disaster attracts on a long time of proof, based on an analysis co-authored by Harvey in 2020. The value of gold moved greater throughout seven of the final 9 main inventory market selloffs stretching again to the late Eighties, researchers discovered.
A dealer works on the ground of the New York Inventory Trade (NYSE) on the opening bell, within the Monetary District of New York Metropolis on March 17, 2025.
Angela Weiss/AFP by way of Getty Pictures
“It’s an excellent observe document, but it surely’s not a certain factor,” Harvey stated. “Though it went up seven out of 9 of those drawdown intervals, that doesn’t imply it is going to be seven out of 9 within the subsequent 9 drawdowns.”
Final week, Paris-based monetary agency BNP Paribas raised its forecast for gold costs, predicting the dear steel would exceed $3,100 an oz.. The corporate attributed the rosy outlook to financial uncertainty incited by Trump, but it surely warned such positive aspects would doubtless fizzle out by the second half of this 12 months.
“The gold market will value in or normalize Trump-driven commerce dangers, because it usually does with geopolitical danger,” BNP Paribas stated in a report shared with ABC Information. “Thus, if there isn’t a ongoing escalation in commerce tensions, gold costs will, in our view, battle to keep up additional upside momentum.”
Some specialists who spoke to ABC Information acknowledged the present value increase might ultimately lose steam, however they nonetheless inspired traders so as to add the dear steel to their portfolios as a method of offsetting the heightened danger of shares.
“Gold provides diversification,” Trevor Yates, an analyst at funding agency International X, instructed ABC Information. “We see gold warranting a spot within the portfolio.”
Traders who add gold for the sake of diversifying their portfolio, nonetheless, might wish to add different property alongside it, resembling Treasury bonds or actual property, Harvey stated.
“There are different secure property in addition to gold,” Harvey stated. “Don’t put your whole eggs in a single basket.”
