Half a century after the collapse of the Bretton Woods system, gold has once again become a hot commodity, surging to a historic high of $3,500.16 per ounce—propelled in part by the ongoing tariff wars. Amid growing fears of a US economic recession, financial markets have shown increasing demand for gold, fuelling a self-reinforcing cycle: high gold prices attract investors, and investors in turn push prices even higher.
Beneath this golden feast lies a looming crisis for the US dollar. According to Li Xunlei, Chief Economist at Zhongtai International, Trump’s renewed tariff hikes are shaking the long-standing international order, sparking global concerns over the credibility of the dollar and US Treasury bonds. As a result, markets are turning toward non-dollar assets, with gold enjoying renewed favour.
As Trump exposes cracks in the global trade and monetary systems, gold has become a key asset in foreign exchange reserves and investment portfolios—especially for countries facing uncertainty in their relations with the United States, which are likely to further increase their gold holdings. The global consensus on boosting gold reserves has rapidly formed amid growing calls for a reshaping of the world order. As the traditional cycle of global trade and currency flows undergoes transformation, gold has emerged as a crucial bridge and is set to play a key transitional role.
