On Feb. 3, 2025, gold bullion reached an all-time high above $2,830 per ounce before retreating slightly. It closed up 0.6% after Trump announced a one-month delay on his planned 25% tariffs against Canada and Mexico.
The sudden policy shift caused the U.S. dollar to weaken from its highest level in over two years, making gold more affordable for global buyers. Gold bullion ETF SPDR Gold Trust GLD has advanced 5.9% so far this year (as of Feb. 3, 2025).
Below we highlight a few reasons why gold ETF investments could be a good idea now.
Gold surged toward a record high as uncertainty surrounding President Donald Trump’s tariff policies fueled demand for the precious metal as a safe-haven asset. Despite the tariff delay for Canada and Mexico, market concerns persist over the broader trade landscape. The United States is set to implement a 10% tariff on Chinese imports starting Feb. 4, 2025, although Trump indicated he would discuss the issue with Beijing.
Even before the latest tariff developments, concerns over a trade war had been driving up gold and silver prices in the United States. Domestic prices have recently surpassed international benchmarks, prompting dealers and traders to accelerate shipments of precious metals into the country ahead of potential tariffs, per Bloomberg, as quoted on Yahoo Finance.
This market volatility has also caused a surge in lease rates for gold and silver—the returns earned by lending out bullion stored in London’s vaults on a short-term basis.
Wall Street faced a setback last week due to the DeppSeek rout. DeepSeek, a Chinese startup developing AI models, grabbed headlines with the release of its new R1 model in late January. The company revealed that training the R1 model cost just $5.6 million, significantly less compared to the $100 million required to train OpenAI’s GPT-4 model.
This raises important questions about AI investment and the potential rise of more cost-efficient artificial intelligence agents, which could disrupt the current market dynamics (read: Will 2025 See Slowing AI Investments in Big Tech? ETFs in Focus).
Amid the ongoing AI-powered market rally, the DeepSeek revelation came as a shock. The S&P 500 and the Nasdaq have solid exposure to Big Tech companies currently under investor scrutiny. This incident further reinforced gold’s appeal as a safe-haven investment (read: Worried About the Magnificent 7? ETFs to Diversify Tech-Heavy Portfolios).
