July 28,2025
24 Karat Gold
In a world where the economic markets are constantly influenced by geopolitics, very few events can change the course of events as dramatically as an unanticipated presidential announcement. On 20th July, 2025, the price of gold jumped that brought a new wave of trade tensions. The former President, Donald Trump, a frontrunner in the 2024 U.S. election campaign, was the talk of the town when he announced the fresh set of tariffs on Canadian goods, which sparked fears of a larger trade conflict. Trump's message did not stop at Canada. He warned that the same actions could be aimed at other nations unless they play fair in trade.
These remarks along with increasing global uncertainty caused a rapid reaction on the financial markets, particularly in commodities. Gold - long thought of as a safe haven asset experienced a sudden increase in demand. The investors seemed worried about the implications of another round of trade skirmishes and rushed for gold. This blog will cover the causes and consequences of gold's rally and details about what it means for global investors.
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It has always been a unique commodity in the financial world. As opposed to regular currencies, it does not rely on central banks or governments. It's not subject to the same risks as stocks or bonds carry. Stocks could crash or even fail but gold remains in place, holding its value.
This is the reason why people tend to look to gold in uncertain times. It doesn't matter if it's political or economic turmoil or unexpected announcements, like Trumps recent tariffs on Canada investors looking for safety. Gold is among the first places they run to.
Trump's announcement shook the markets. Investors were worried about another round of trade disputes, mainly with a close partner like Canada. As a result, they scrambled to purchase gold. Within a matter of hours, the price of gold increased by over 2.3 percent, and reached the highest in more than three months. It went above USD 2200 an ounce for the first time since April 2025.
It was a classic illustration of how gold shines the brightest when the world feels uncertain.
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Trumps move to impose new tariffs on Canadian steel, aluminum, and certain agricultural products was justified under the pretext of protecting American jobs and addressing what he termed - unfair trade practices. This move is similar to the actions he took during his first time in office, when he imposed tariffs on nations like China and Mexico. This created trade wars and economic tensions throughout the world.
Although Canada is one of Americas biggest trading partners, the relations have not always been smooth. By hitting Canada with new tariffs, Trump is not just picking the fight with a neighbour; hes sending a warning to all countries as well. His message is clear: more tariffs could be coming if other nations don't agree with his trade terms.
This uncertainty could cause many issues for large corporations which depend on smooth global trade. It can make it difficult to determine price ranges and supply chains or make major investment choices. If things seem to be a bit uncertain in the global economy, investors tend to opt for more secure assets, like gold. So, when tensions in the world increase, gold prices tend to increase as well.
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If you are wondering why gold reacts so quickly during trade tensions, just take a look at what happened not too long ago. During the U.S. and China trade war from 2018 to 2019, gold prices shot up by nearly 20 percent. Every time there was a new tariff, a political jab, or a hostile tweet, gold got another boost.
That is no accident. Trade wars usually slow down the global economy. Companies make less money, job markets feel the pressure, and currencies become unstable. In times like that, investors tend to pull their money out of risky assets like stocks and move it into something safer. Thats where gold comes in.
Also, trade wars often lead to higher prices on imported goods. When things cost more, inflation rises and gold is known to protect against inflation. So, when prices go up, gold becomes even more attractive to investors.
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Trumps tariff threats did not just stir up trade they shook global currency markets too. The Canadian dollar dropped sharply against the U.S. dollar, and other major currencies like the euro and yen also became volatile. Since gold is priced in U.S. dollars, a weaker foreign currency makes gold cheaper for international buyers, increasing demand and boosting its price.
On the other hand, if trade tensions harm the U.S. economy and weaken the dollar, gold still gains value as a safe store of wealth. So, whether the dollar strengthens or slips, trade uncertainty often sends gold prices higher.
As soon as Trumps tariff news hit the headlines, investors rushed into gold. Gold backed ETFs like SPDR Gold Shares (GLD) saw a huge spike in activity, marking their biggest one day inflow in months. Futures traders also jumped in, pushing December contracts to new highs, betting that prices would climb further. Even everyday investors started buying more physical gold bullion and coin sales surged across the U.S. and Canada. This rush reflects growing anxiety about economic stability. Once fear enters the market, it often builds momentum causing gold rallies to continue for days or even weeks.
Trade tensions also catch the attention of central banks. The U.S. Federal Reserve, balancing between curbing inflation and supporting growth, might adjust its policies if global trade slows down. A more cautious approach like cutting interest rates - can weaken the dollar and give gold prices another boost.
Around the world, especially in Asia and the Middle East, central banks have already been buying more gold to protect against political and economic shocks. Additionally, new government regulations for gold in 2025 including policy updates on gold imports, taxes, and digital gold norms are shaping how gold is traded and held globally. These developments highlight a clear trend: when uncertainty rises, gold becomes a strategic reserve, not just an investment.
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It is hard to say exactly where gold is headed next, but the outlook is strong. Goldman Sachs recently raised its 2025 gold forecast to USD 2,350, citing global tension and rising demand from central banks. Some experts believe that if Trumps trade threats turn into full blown action against several countries, gold could climb as high as USD 2,500. Still, nothing is guaranteed. If the situation calms down or central banks hold off on easing policies, gold might pause or even pull back. The key now is watching what happens next on the global political stage.
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As global trade tensions rise, gold once again proves its value as a safe haven asset. Whether you are a seasoned investor or someone seeking financial security, gold remains a smart option during uncertain times.
If you are looking to sell gold in Delhi or connect with a trusted Gold Jewellery Buyer, visit 24Karat for reliable and fair transactions. Stay informed, watch the markets closely, and consider adding or liquidating gold based on your financial goals. Visit today to get the best value for your gold!
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Higher gold prices are traditionally viewed as a safe-haven asset during trade tensions and economic uncertainty.
Tariffs could slow economic growth, slow the economy, and create volatility in the markets which increases demand for gold as a safe and stable asset.
When global currencies are weak compared to the U.S. dollar, gold becomes cheaper for buyers around the world, which will increase demand and ultimately prices.
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