Gold Surges 25% to $3,317 as Tariffs Fuel Volatility

Gold prices have surged past $3,300 per ounce, marking a historic high as global markets grapple with heightened volatility. This significant increase reflects investor anxiety over economic uncertainty and the impact of controversial tariff policies under the current administration. Consequently, experts have issued conflicting forecasts on how this may influence Bitcoin.

At the time of writing, gold has reached a peak of $3,317, representing a 25% increase since the beginning of the year. The global trade war is the primary force behind gold’s continued rise, with retaliatory tariffs among major economies clouding the global economic outlook. The US imposed new tariffs, quickly triggering countermeasures from other major economies, further escalating the situation.

Helima Croft, head of global commodity strategy at a major financial institution, noted that while general uncertainty and deteriorating economic conditions are driving interest in gold, most of gold’s price action is related to the uncertainty surrounding tariffs. Additionally, there are growing concerns that tariffs could directly target imported gold, leading to stockpiling within the United States. Major banks have been moving large quantities of gold from London to New York, with one bank planning to transport $4 billion worth of gold this month.

Besides the tariff war, another factor contributing to the price spike is the Senate Budget Resolution for the fiscal year 2025. This resolution allows the US to increase its budget deficit by up to $5.8 trillion over the next ten years. The price spike reflects fears of currency devaluation due to ballooning deficits. Goldman Sachs has also raised its year-end gold forecast to $3,700, citing stronger-than-expected central bank demand and rising recession risks.

While gold shines, Bitcoin, often called “digital gold,” has drawn mixed opinions. Anthony Papillano, CEO of a major investment management firm, noted that Bitcoin has dropped around 10% since the start of the year, while gold has gained 20%. However, both assets have risen approximately 35% over the past year. He outlined reasons why Bitcoin might soon rally like gold, including the US government’s strategic Bitcoin reserve plans and the younger generation’s growing view of Bitcoin as part of a long-term investment strategy. History tells us Bitcoin’s returns will skyrocket past Gold in the coming months, Papillano predicted.

Supporting this view, several analysts noted that Bitcoin often follows gold’s upward momentum with a lag of about 100 days, especially during increased global liquidity. Additionally, companies purchased more than 95,400 BTC in the first quarter of 2025, showing strong institutional demand. However, not everyone agrees. Economist Peter Schiff, a long-time Bitcoin critic, offered a contrasting view. He claimed the best trade right now is to sell all Bitcoin and other cryptocurrencies and invest entirely in gold and silver mining stocks.