What's Actually Driving The Latest Gold Surge? Several Factors Are At Play

Gold prices have been on a tear lately, surpassing $3,000 per ounce in mid-March and up nearly 38% in the last year.

Investors have been flocking to the precious metal as economic uncertainty grows, with global trade tensions playing a major role.

The latest boost came after U.S. President Donald Trump announced new auto tariffs, sparking concerns about inflation and sending markets into a frenzy. With fears of a trade war escalating, gold's reputation as a safe-haven asset has only strengthened, according to Reuters.

See Also: Gold M&A Deals Are Accelerating, But Average Deals Are Smaller, Research Shows

There are plenty of ways to invest in gold, and it's not just about buying physical bars. The spot market, where prices are determined in real-time, remains a major force, especially in financial hubs like London. Futures markets, led by COMEX in New York, allow traders to lock in prices for gold at a later date. Exchange-traded funds (ETFs) have also gained popularity, letting investors gain exposure to gold prices without dealing with storage.

For those who prefer something tangible, gold bars and coins remain a popular option. You can even buy gold at Costco.

So, what's actually driving gold's rise?

A combination of factors is at play, but investor sentiment is a big one. When financial markets turn volatile, gold tends to shine as a safe investment. Currency movements also matter—gold and the U.S. dollar often move in opposite directions, meaning a weaker dollar makes gold more attractive.

Central banks are another major influence. Many have been increasing their gold reserves in response to global economic shifts, helping push demand to record levels last year, according to CNBC.

With gold prices climbing, financial analysts are adjusting their expectations. Goldman Sachs and Bank of America have both raised their forecasts for the coming year, citing strong investor demand and continued geopolitical uncertainty. As global economies navigate inflation concerns, shifting trade policies, and fluctuating interest rates, it will be interesting to monitor gold's performance.

Now Read:

• EXCLUSIVE: This FinTech Disruptor Is Giving Financial Advisors Their Own ‘Iron Man Suit’ — Here’s How

Image: Shutterstock