Gold has surpassed the $3,300 mark, driven by a weak dollar and the looming US-China trade war, which are attracting more investors and extending its year-to-date gain to over 26%.
The price surge aligns with the growing trade war, as President Donald Trump has ordered an investigation into potential tariffs on rare earth imports, further intensifying the dispute with China.
In response to significant tariffs imposed by the U.S., Beijing has enacted restrictive measures on the export of rare earth metals and rare earth magnets to the United States as part of its retaliation.
This escalating trade tension has contributed to a decline in the U.S. dollar, tracked by the Dixie (USDX), which has dropped by more than 4% in April alone, bringing its year-to-date loss to over 8% so far in 2025.
Customarily, investors are seeking refuge in gold, which has risen from an opening price of $3,157.30 at the beginning of April, successfully reaching both the $3,200 and $3,300 thresholds.
This impressive surge positions gold at the top of the commodity table year-to-date, with consecutive gains since January, relegating U.S. coffee to second place.
Market trend
Gold is currently experiencing notable bullish momentum in the financial markets, having recorded a year-to-date performance of 27% in 2024.
- In January 2025, the commodity surpassed the $2,800 resistance level, maintaining its upward movement into February.
- The yellow metal has continued to rise as the dollar weakened further in March and April, resulting in a year-to-date gain of 26%.
According to Lukman Otunuga, senior research analyst at FXTM, several factors are driving the increase in gold prices: “Gold is supported by a weaker dollar, uncertainty around tariff announcements, and concerns about a potential global recession.”
He remarked that once prices exceed $3,300, trading psychological factors will play a significant role in shaping the market trend of the commodity:
‘’While optimistic investors may set their sights on $3,400 and $3,500, the potential for profit-taking or favourable news in U.S.-China trade relations could prompt a market pullback.’’
Tariffs on precious metals
The trade conflict between the U.S. and China has escalated, with President Donald Trump instructing his team late Tuesday to investigate new tariffs imposed by China.
- In response to significant tariffs imposed by the U.S., Beijing has enacted restrictive measures on the export of rare earth metals and rare earth magnets to the United States.
Market analysts express concern that the U.S. economy may be at risk without these essential minerals, as domestic production is minimal despite their vital roles in various industries, including defence and technology.
Nonetheless, Trump is particularly concerned about U.S. dependency on these materials, emphasizing that ‘’reliance on mineral imports from China poses risks to national security and defense readiness.’’
