Trade wars and various economic crises lead to the search for safe assets. Gold has typically played a haven role during such periods, protecting investors from instability. However, given the intricacies of the modern world and the changes in the global economy and financial markets in 2025, the question arises: will gold retain its reputation as a "haven" in today's trade wars?
Gold in 2018
In 2018, when the trade war between the U.S. and China began in July with duties on $34 billion worth of goods, gold initially declined. This was amidst a general increase in risk and uncertainty in the markets. However, as trade measures worsened and uncertainty in the global economy increased, gold began rebounding.
The gold price rose to around $1300 per ounce in 2018, confirming its role as a safe-haven asset in the face of trade conflicts. Since then, gold has shown incredible growth.
However, it must be remembered that in 2018, gold was not at the level of its historical highs.
Gold falls after tariffs 2018
However, by the end of Donald Trump's first term in 2021, gold had delivered impressive returns over the distance. Despite initial fluctuations in 2018 due to the outbreak of the trade war, the metal has strengthened its position as a haven asset over the longer term. Heightened global economic risks, rising inflation expectations, and volatility in stock markets have contributed to sustained demand for gold, making it one of the most profitable instruments in investors' portfolios over this period.
Strengthening gold's position towards the end of Donald Trump's presidential term.
Gold in 2025
In 2025, investors became increasingly focused on gold again in light of heightened trade wars and decreased global economic confidence. Unlike in 2018, however, the conditions surrounding gold are less clear-cut. In 2018, gold fell initially, but as the crisis progressed, it zeroed throttle and grew aggressively. However, in the face of a global restart of geopolitical conflicts and trade sanctions, gold is already gliding at record highs and routinely achieving tops.
These dynamics carry respective questions and risks. From the technical standpoint, gold's prolonged growth and periodic record tops may mean the market is overheating, and a corrective phase is coming. In 2018, gold was merely tapping out the bottom and gaining momentum— it is now coming from the occasion of aggressive growth, approaching new tops. It is essential to develop further analysis leveraging this latest assessment of gold.
Moreover, significant events that may influence the gold price in 2025 are still happening right now - we're still in the equation for the provocative action of the respective significant economies worldwide. It's too early to claim that gold will be the primary haven asset again. Financial markets have changed.
Gold right now
In the current environment, it is extremely important to monitor gold's behavior closely: its price dynamics, the level of demand from institutional and retail investors, and attempts to update the historical maximum. The asset is already close to record highs, and any movement—up or down—may signal a change in market sentiment.
Will gold remain a defensive asset during trade wars?
Gold has performed well in the 2018-2021 trade war cycle. However, the current situation is far more complex and multifaceted. Unlike 2018, when gold started from low levels, it is now near all-time highs, raising valid concerns about market overheating and a likely correction.
The financial environment has changed: major players can now utilize alternative instruments such as digital assets, macroeconomic risks have intensified, and global politics have become even less predictable. Trade conflicts continue to unfold, and gold's final role in this cycle is yet to be determined. Whether it will once again become the primary protective asset is an open question. One thing is sure: closely monitoring the gold price, demand, and market sentiment will be critical to making informed investment decisions in the coming months.
This article was written by FL Contributors at www.forexlive.com. Read More Details
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