Each Tariff Triggers a New Trend in Gold 

Gold has experienced a renewed surge in interest following the onset of the trade war in 2018. A clear pattern has emerged—each time tariffs are introduced, gold pivots upward with precision. Prior to the trade war, gold remained stagnant between $1,100 and $1,400 for five years. However, with the introduction of new tariffs, gold’s trajectory shifted dramatically.

The most recent tariffs announced by the U.S. in February 2025, targeting Mexico, Canada, and China, raise an important question: Could this be another pivotal moment for gold?

A Case Study: Gold’s Reaction to Trade Tariffs

Historical data suggests a strong correlation between major tariff announcements and significant movements in gold prices. The following are key instances where tariffs influenced gold:

• March 2018: The U.S. imposed 25% tariffs on steel and 10% tariffs on aluminium imports from most countries, citing national security concerns.
• July 2018: 25% tariffs on $34 billion worth of Chinese imports, focusing on machinery, electronics, and auto parts.
• August 2018: Another 25% tariff on $16 billion in Chinese goods, targeting semiconductors and chemicals.
• May 2019: The 10% tariff on $200 billion of Chinese goods increased to 25%.
• September 2019: 15% tariffs on $112 billion of Chinese consumer goods (including footwear, clothing, and electronics).
• October 2022: First major export ban on AI chips & semiconductor Equipment

Interestingly, during President Biden’s administration, gold prices remained relatively stable within a specific range. Unlike his predecessor, Biden’s tariffs were more strategic, focusing on technology and supply chain resilience. Inflationary pressures seemed to absorb these tariffs. However, when Biden introduced export controls on advanced chips to China, gold responded by pivoting from its monthly low and moving higher. 

Trump's Tariffs: Expectations vs. Reality

President Donald Trump’s approach to tariffs significantly impacted the cost of everyday goods, food, and energy, contributing to inflationary pressures. As a result, gold reacted sharply each time these tariffs were implemented.

A notable pivot occurred in November 2024, following Trump’s re-election. The market anticipated a return to his hardline tariff policies—and it was correct. On the first day of February 2025, the Trump administration announced fresh tariffs, this time expanding beyond China to include Canada and Mexico. 

Source: TradingView

Gold's New Support at USD 2,600

From a technical perspective, gold remains fundamentally strong, with its primary trend still upward. January 2025 closed with a significant breakthrough above its recent months’ congestion, a long-standing resistance line dating back to 2011. This suggests that the previous resistance level at $2,600 may now serve as a new support level for gold.

For a more detailed short-term trading strategy, refer to this week’s video analysis. Additionally, for further reading, explore my article “On A Radical Note Toward and Beyond 2025”—detailing why central banks are going all-in on gold. Read more here.  With CMC’s product offerings I see exciting opportunities ahead in gold across all asset classes. Stay tuned for more insights. 

For more insights, check out this video. 

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