Navigating uncertainty: How Trump’s turbulent leadership propels gold towards new heights in 2025

5 Feb 2025

One day Trump wants Greenland, the next it’s Gaza, and who knows what he will covet tomorrow? Such mayhem is good for gold, which thrives when things get crazy.

US President Donald Trump is a gold bar’s best friend.

The precious metal has extended its scorching record run into 2025 and shows no signs of cooling down as Trump raises the political temperature on the global geopolitical stage.

This week gold’s price scaled new peaks at over $2,840 (R52,785) an ounce as every Trump pronouncement dropped jaws and gave markets whiplash.

“Anticipation of Trump’s tariffs has been moving the gold market,” John Reade, senior market strategist at the London-based World Gold Council (WGC), told Daily Maverick in an interview at the Investing in African Mining Indaba.

“We have seen a big dislocation between the Comex futures market in the US and the London OTC price because traders in New York are worried that if they have to move gold into New York and deliver it against futures contracts, they could be subject to a tariff,” he said.

Surging levels of uncertainty

And then there are the surging levels of uncertainty which are bolstering gold’s historic appeal as a “safe-haven” asset. When things get crazy, gold’s price climbs.

One day Trump wants Greenland, the next it’s Gaza, and who knows what he will covet tomorrow?

“We are in a situation now where there is more uncertainty about what is going to happen in terms of US economic and political policy than I can remember since the end of the Cold War. And risk and uncertainty is generally good for gold,” Reade said.

Gold’s current bull run has been roaring along for the past five years, initially ignited by the uncertainties around the Covid-19 pandemic.

It has been strongly supported by red-hot demand from central banks, especially those from emerging markets, which have been keen to diversify their asset base and reduce their dependence on the US dollar.

The World Gold Council this week released its latest quarterly report that looks at global demand trends, and everything has come together to lift gold’s price.

Historic highs and record prices

Gold demand hit historic highs in 2024 and reached new record prices 40 times over the course of the year, the report said.

“Central banks continued to hoover up gold at an eye-watering pace: buying exceeded 1,000 tons for the third year in a row, accelerating sharply in Q4 to 333 tons.”

And gold is not just a store of wealth — it also has industrial applications that are growing as AI technology ramps up.

“Annual technology demand was also additive to the global total: it grew by 21 tons (+7%) in 2024, largely driven by continued growth in AI adoption,” the report read.

The outlook for 2025 sees no sign of the surge abating — this means $3,000 an ounce is probably on the cards.

“We expect central banks to stay in the driving seat and gold Exchange Traded Funds investors to join the fray,” the World Gold Council said.

And of course there is the loose cannon that is Trump.

“We expect the trajectory for rates in the US to be down but bumpy, given the Trump administration’s all out pro-growth agenda stoking temporary inflationary fires in a late business cycle. This uncertainty is likely to keep term premia intact and the bond-equity correlation elevated — a positive for gold,” the report noted.

This is all good news for gold producing companies and countries.

JSE-listed Harmony Gold’s share price, for example, is up around 40% in the year to date, and 2025 is only five weeks old.

Buckle up folks. It’s going to be a wild ride. DM

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Surging levels of uncertainty

Historic highs and record prices