Why Donald Trump's first weeks in office have sparked a rush to buy gold

• ING expects gold to reach $3,000 per ounce this quarter.
• Investors have flocked to the safe haven amid Trump's trade and geopolitical uncertainty.
• Central bank buying and Fed rate cuts will further boost gold's price.

Gold is hovering at fresh record highs early in 2025, and the precious metal is getting a boost from investors looking for safe havens in an uncertain political environment.

Although it was presumed that gold would keep rallying through 2025, recent Trump administration policies have sped up gains, ING analysts said this week. Gold rose to over $2880 per ounce on Wednesday, a record that put it up nearly 10% for the year.

ING now expects the yellow metal to reach $3,000 per ounce this quarter, a level Wall Street once considered a year-end target.

Bullion is generally treated as a shield against macroeconomic and geopolitical risks, and investors have reinforced this notion already this year by flocking to gold amid a spike in trade uncertainty stemming from Trump's tariff maneuvering.

Trump announced, and then delayed, 25% tariffs on goods from Canada and Mexico. Economists have warned that such steep duties would amount to an inflationary shock on the economy, and Trump's announcements sent investors seeking shelter in the week.

"Despite the US coming to a deal with Canada and Mexico, the uncertainty over trade and tariffs will continue to buoy gold prices. If trade tensions intensify and we see more retaliatory measures, safe haven demand for gold will continue," ING wrote.

Tariffs have also stirred fear that access to physical gold could become more expensive, ING said. Although the metal has not been targeted by recent duties, there's no certainty that gold won't included in the future. Mexico and Canada accounted for 30% and 15% of gold imports in the US last year and Trump has hinted at tariffs that go beyond these countries.

The Financial Times reported that tariff anxiety has led to a surging $82 billion stockpile of gold in New York that has caused shortages elsewhere. A premium on Comex gold inventories in the city has added to this trend. Stockpiling could further bolster prices, ING said.

The bank also noted that the president's recent remarks on the Gaza Strip have amplified geopolitical uncertainty, underpinning momentum for gold. On Tuesday, Trump suggested that the Gaza Strip could be turned over to the US at the conclusion of the Israel-Hamas war.

ING isn't the only one changing its outlook on gold's rally. UBS also updated its outlook on Thursday, raising its 12-month gold forecast from $2,850 per ounce to $3,000.

Both firms anticipate that the Federal Reserve will have room to cut interest rates this year. This move would prompt more gold buying, as lower rates risk stoking inflation.

Foreign central banks will also remain a key pillar of support for the yellow metal and will likely continue their massive purchases of the commodity this year. Gold has become sought after as a way to diversify foreign reserves away from the dollar.

According to the World Gold Council, central bank buying has exceeded 1,000 tons for the third year in a row, jumping sharply to 333 tons in the fourth quarter.