Gold prices topped US$4,300 this week. What’s driving the surge?

Sam Nguyen shows a gold bar at her shop in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong, File)

As economic uncertainty deepens, the rush for gold continues — with prices for the precious metal topping US$4,300 for the first time this week.

The going price for New York spot closed at a record US$4,326 per troy ounce on Thursday. Futures also traded as high at more than US$4,344 per troy ounce Thursday, before falling below the $4,300 mark Friday morning. Still, gold is up 6.7 per cent over the last week, marking one of its best weeks to date.

Gold sales can rise sharply when anxious investors seek a “safe haven” for their money. For the U.S., the latest gains arrive amid the now weekslong government shutdown and ongoing trade wars abroad — with U.S. President Donald Trump most recently threatening to place much higher tariffs on China, before appearing to walk back those potential new levies as unsustainable. Still, his barrage of other import taxes has already strained economies worldwide. Meanwhile, the prospect of lower interest rates is also making gold a more attractive investment.

How much have gold prices climbed this year? What about silver?

Gold futures are up nearly 60 per cent since the start of 2025 — trading at about US$4,268 per troy ounce, the standard for measuring precious metals, as of around 11:45 a.m. Friday. That’s up from around $2,670 at the beginning of January.

Silver has seen an even bigger percentage jump year to date. Silver futures are up about 70 per cent, trading at over US$50 per troy ounce Friday morning.

Why are prices going up?

A lot of it boils down to uncertainty. Interest in buying metals like gold typically spikes when investors become anxious.

Much of this year’s economic turmoil has spanned from Trump’s trade wars. Since the start of 2025, steep new tariffs the president has imposed on goods coming into the U.S. from around the world have strained businesses and consumers alike — pushing costs higher and helping to weaken the job market. As a result, hiring has plunged while inflation has inched back up. And more and more consumers are expressing pessimism about the road ahead.

The U.S. government shutdown adds to those anxieties. Key economic data has been delayed — and scores of federal employees are already feeling the effects of furloughs and working without pay as long as the shutdown lasts, which has no immediate end in sight. The Trump administration also moved to use the shutdown to conduct mass firings, although a judge temporarily blocked such action.

Separately, analysts have pointed to continued weakness of the U.S. dollar and renewed rate cuts from the Federal Reserve. Last month, the Fed cut its key interest rate by a quarter-point — and projected it would do so twice more this year.

Investments in gold have also been driven by other factors over time. Over recent years, there’s been strong gold demand from central banks around the world — particularly amid heightened geopolitical tensions, such as the ongoing wars in Gaza and Ukraine.

And on Wall Street this week, several regional banks saw sharp losses amid scrunity over quality of loans, although recovery seemed to be steadying the market on Friday. Meanwhile, investors appeared to be distancing themselves from riskier assets like cryptocurrency — with bitcoin, for example, down 2.67 per cent.

What about jewelry?

Many jewelry merchants and dealers have increasingly reported surges in customers looking to check the value of gold they own — sometimes opting to melt or sell family heirlooms to cash in on the precious metal’s rising price.

At the same time, those in the market for gold jewelry may be feeling “sticker shock” if they can’t afford certain products anymore — particularly if it’s something impacted by both rising material costs and tariffs.

Larger retailers like Pandora and Signet have acknowledged these headwinds in recent earnings calls.

Is gold worth the investment?

Advocates of investing in gold call it a safe haven — arguing that the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road as a hedge against rising inflation. Some also take comfort in buying something tangible that has the potential to increase in value over time.

Still, experts caution against putting all your eggs in one basket. And not everyone agrees gold is a good investment. Critics say gold isn’t always the inflation hedge many claim — and that there are more efficient ways to protect against potential loss of capital, such as derivative-based investments.

The Commodity Futures Trade Commission has also previously warned people to be wary of investing in gold. Precious metals can be highly volatile, and prices rise as demand goes up — meaning “when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the commission noted.

Gold demand escalates mercury poisoning warnings

The frenzy for gold has also resulted in health and environmental consequences — with officials pointing to rising demand for mercury, a toxic metal that is key in illegal gold mining worldwide.

Mercury is widely used to separate gold during artisanal or small-scale mining. But it pollutes water, accumulates in fish, makes its way into food and builds up in people’s bodies, leading to neurological and developmental harm. Even small-scale exposure can carry serious risks — putting in danger workers who rely on the industry, as well as residents in affected areas more broadly.

The Associated Press has reported about the effects of mercury poisoning tied to gold mining in countries like Senegal, Mexico and Peru, among other parts of the world.

Wyatte Grantham-philips, The Associated Press