An escalating trade war between the United States and China, combined with the economic uncertainty sparked by U.S. President Donald Trump‘s economic policies, is driving investors towards one of the more stable investments: gold.
The precious metal soared past $3,200 an ounce on Friday after Trump’s tariffs caused global markets to froth, raising concerns about inflation and a global recession, according to Reuters. While the president halted most duties, he boosted China’s rates to 145%, prompting Beijing to lift its tariffs on U.S. goods to 125%.
“We expect gold’s rally to extend into next year and for prices to stabilize at higher levels further out.” UBS analysts expect prices to peak at $3,500/oz this year.
Whether it’s a good time to buy gold depends on various factors, including your investment goals, risk tolerance and time horizon, the broader economic outlook, and forecasts about the gold market.
Historically, many people view gold as a hedge against inflation and currency fluctuations, according to Investopedia. Others see it as a store of value during economic downturns. At the same time, some may find diversifying a portfolio of stocks and bonds useful, given its low correlation to both assets.
“If you look at gold’s performance historically, it’s the kind of asset that should perform well through uncertainty, as it has done in five out of the last seven recessions,” said Joseph Cavatoni, chief market strategist for North America at the World Gold Council. “For people looking for a store of value and a portfolio diversifier, gold has a strong track record of delivering those qualities.”
In October 2024, Costco said it had found massive success selling gold bars to its members. In its fourth quarter earnings call, Costco CEO Gary Millerchip said the metal “was a meaningful tailwind to e-commerce comps.”
An April 2024 Wells Fargo report stated that the bank’s analysts believe the warehouse retail giant is selling between $100 million to $200 million in gold per month.
Contributing: James Powel, USA TODAY and Reuters
Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Reach him at fernando.cervantes@gannett.com and follow him on X @fern_cerv_.
This article originally appeared on USA TODAY: Price of gold reaches historic record: What you need to know
