Gold Price Surges Above $3,350 Amid Renewed Tariff Threats from Trump
May 23, 2025 — Gold prices experienced a significant boost on Friday, climbing above $3,350 per ounce as market participants sought refuge in the precious metal amidst renewed trade tensions triggered by U.S. President Donald Trump’s recent tariff threats.
Market Movements and Tariff Announcements
By 10:35 a.m. ET, spot gold rose by 1.6% to $3,351.95 an ounce, while U.S. gold futures surged 1.7% to $3,352.10 an ounce in New York. This rally marks the continuation of an upward trend for gold, which is on track for its best week in six. The catalyst behind this increase was Trump’s unexpected announcement of a proposed 50% tariff on imports from the European Union, scheduled to take effect starting June 1. He also targeted technology company Apple, threatening a 25% tariff on iPhones that are not manufactured within the United States.
These announcements triggered a decline in equity markets and a concurrent easing of the U.S. dollar, leading investors to gravitate towards the safety of gold—a traditional safe-haven asset.
Rising Concerns Over U.S. Fiscal Stability
The surge in gold prices is also tied to growing concerns about the fiscal stability of the U.S. economy, especially following a recent downgrade of the U.S. credit rating by Moody’s. Analysts are wary that the tax bill endorsed by Trump, which recently passed the House, could further exacerbate the nation’s swelling deficit.
Rick Kanda, managing director at The Gold Bullion Company, noted that the downgrade from Moody’s reflects a mounting anxiety regarding U.S. credit stability. “As these concerns grow and inflation fears linger, investors are turning to physical gold for security. This shift is clearly driving prices up, and we may only be scratching the surface of this trend,” he stated.
Economic Indicators Impacting Gold Prices
Meanwhile, the yield on 10-year U.S. Treasury bonds has increased, hovering around 4.5%. Historically, rising yields would pose a challenge to non-yielding assets like gold; however, the correlation between these two indicators appears to be weakening. Investors seem willing to forgo the higher interest payments in favor of the relative safety offered by gold investment amid uncertain economic conditions.
As of now, gold prices are approximately $150 lower than the all-time high recorded last month, highlighting the volatility and unpredictability of market conditions spurred by global trade tensions.
This growing trend toward gold as an asset reflects a broader shift in investor sentiment, as the implications of U.S. trade policies and fiscal health continue to unfold in complex ways.
For ongoing updates and analyses on market movements, visit our comprehensive commodities section at Smart Money Mindset.
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