A Bloomberg article recently stated that the 2025 gold rally has gone from “strength to strength.”1https://www.bloomberg.com/news/articles/2025-04-21/gold-climbs-toward-record-as-global-trade-war-concerns-dominate This is both a powerful and accurate commentary on gold’s 2025 price performance which has been fueled by a substantial stock collapse, dollar weakness, tariff mayhem, and Donald Trump’s recent attack on the Fed.
It seems that everything is fueling gold’s record setting rally. Since Trump’s infamous Liberation Day announcement, the Dow and the Nasdaq are down almost 8%, while the S&P has slumped more than 7%. Wall Street is melting down on fears of a full-blown trade war and punishing reciprocal tariffs — while investors are nervous about corporate profits and the rising risk of a recession.
Wall Street is now on track for its worst April since The Great Depression.
“The Dow Jones Industrial Average is set to have its worst April since 1932 after losing almost 1,000 points on Monday, Dow Jones Market Data shows. Similarly, the S&P 500 has had its worst performance since inauguration day for any new president dating to 1928, Bespoke Investment Group has found. Concerns about President Donald Trump’s trade policies and the possibility that he may remove Federal Reserve Chair Jerome Powell have prompted investors to expect bigger losses in the near future.”2https://finance.yahoo.com/news/dow-heading-worst-april-since-175203681.html
The Battered U.S. Dollar
As the U.S. financial markets struggle and the dollar weakens overseas, many are pronouncing that this may very well be the last days of dollar dominance. Since mid-January, the dollar has fallen 9% against major currencies, tumbling to its lowest level in three years.
The speed and severity of the dollar’s decline, is raising concerns that world may finally be losing faith in the buck.
“The recent decline in the U.S. dollar has sparked concerns among market participants. There is a growing apprehension that the drop reflects a deeper investment unease as President Trump attempts to modify global trade dynamics. The dollar’s long-standing dominance in international trade benefits from low U.S. borrowing costs and amplifies American geopolitical influence. Economists warn that this trust, built over decades, could be swiftly undermined.”3https://markets.businessinsider.com/news/stocks/dollar-decline-raises-concerns-on-its-future-reserve-status-1034605726
The U.S. dollar became the world’s reserve currency in the aftermath of World War II. The 1944 Bretton Woods Conference, which saw the creation of the International Monetary Fund and World Bank, required countries to peg the value of their currencies to the dollar which was itself, pegged to gold.
Trump’s Big Tariff Wild Card
On April 2nd President Trump declared a “national emergency to increase America’s competitive edge, protect our sovereignty, and strengthen our national and economic security.”4https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/ It took the form of sweeping tariffs on nearly all U.S. trading partners.
“In an unprecedented move, the Trump administration on Wednesday announced additional tariffs of at least 10 percent on most other countries, while imposing higher duties on those nations levying very high rates on U.S. imports or thought to otherwise engage in trade or currency practices seen as unfair by the current U.S. government … Some countries that levy high import dues are now seeing additional tariffs slapped on their exports to the United States. These include, for example, India (+26 percent), Tunisia (+28 percent) or Algeria (+30 percent). Other nations that are not known for their high-tariff regimes but nevertheless received additional tariff rates higher than the standard 10 percent due to other practices flagged include the European Union countries (+20 percent) or China (+34 percent, rate now at +54 percent).”5https://www.statista.com/chart/34229/additional-reciprocal-tariffs/
The administration made the move despite the threat of global backlash, reciprocal tariffs, and a full-blown trade war. Trade wars not only ruffle diplomatic feathers, they can disrupt supply chains, spike inflation, increase the cost of goods for consumers, cause a pullback in spending, boost economic uncertainty, and ultimately slow economic growth. All of these fears now appear to be playing out.
“The trade war is no longer just a geopolitical talking point — it’s now a frontline reality for thousands of workers across North America. In the wake of sweeping new tariffs imposed by the Trump administration, a growing list of companies have announced job cuts, operational pauses, and in some cases, full-scale shutdowns. The fallout is cascading through industries as diverse as automotive, steel, consumer goods, and even tabletop gaming. With thousands already laid off and more cuts expected, many fear the ripple effect from these tariffs could further strain a fragile post-COVID recovery, and threaten the broader North American labor market.”6https://www.theglobeandmail.com/investing/markets/stocks/STLA/pressreleases/31968030/tariff-fallout-begins-major-companies-slash-thousands-of-jobs-citing-rising-trade-tensions/
The President Takes on the Fed
When it comes to federal interest rate policy, President Trump has made his feelings about Fed Chairman Jerome Powell, fairly clear. The president wants Powell to cut interest rates immediately and claims he’s moving too slowly on implementing a rate change.
A lower Fed rate which would make borrowing more affordable — impacting home loans, car loans, credit card rates, etc. It would also encourage broader business investment and give the stock market a very needed boost.
But some see Trump’s pressure on Powell as dangerous and a threat to the Fed’s independence:
“Mr. Trump is now considering firing Mr. Powell. And as he turns up the pressure – calling the Fed chair names and questioning his acumen – he’s ignited a firestorm in legal and financial circles. Forcing him out would overturn nearly a century of legal precedent and could well undermine international confidence in the dollar … And the market fallout is undeniable, as traders begin to question the stability of the dollar and the credibility of future administrations in addressing inflation.”7https://www.csmonitor.com/Business/2025/0421/market-falters-trump-powell-standoff
The Federal Reserve Act of 1913 says a Fed Chair can only be fired for “cause” and no Chair of the Federal Reserve has ever been removed by a president. It further maintains the central bank’s independence from both the executive and the legislative branches of government, cementing its independence to conduct monetary policy and oversee the nation’s monetary system. For generations the Fed has acted independently and not bowed to pressure from any political party, prevailing administration or White House. That’s not to say that there has not been political pressure before, but the current pressure from President Trump has been deemed more extreme.
“Trump’s rhetoric has triggered alarm bells for market watchers, many of whom believe that Powell’s termination would destabilize global financial markets, undermine the credibility of the US dollar, and set a dangerous precedent of a central bank that can bend under political pressure … The Fed is accountable to Congress, but it makes monetary policy decisions related to its mandate—low, stable inflation and maximum employment—separate from both the legislative and executive branches. That’s by design.”8https://www.morningstar.com/markets/why-feds-independence-matters-markets-economy-your-wallet
Gold is the Only True Safe Haven Left
Amid the stock market collapse, the tariff tumult, and the tension between the White House and the Fed — gold has enjoyed a seemingly unstoppable march to near daily all-time records. It is up over 27% year-to-date and an astonishing 95% over the past, five years.
It has outperformed almost every other asset class as investors seek safety, security, and portfolio preservation.
“Typically, in risk-off moments, traders turn to US government debt. But given a recent selloff in Treasuries and the US fiscal position generally, gold is now ‘the only true safe haven left,’ according to analysts at Jefferies Financial Group Inc.”9https://www.bloomberg.com/news/articles/2025-04-22/gold-surges-to-record-as-trump-ramps-up-threats-on-fed-s-powell
Gold has indeed gone, from strength to strength — and its economic brawn looks likely to continue into the foreseeable future, particularly since JP Morgan now sees gold crossing the $4000/oz threshold in Q2 2026.10ttps://finance.yahoo.com/news/jp-morgan-see-gold-prices-192717669.html
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- https://www.bloomberg.com/news/articles/2025-04-21/gold-climbs-toward-record-as-global-trade-war-concerns-dominate
- https://finance.yahoo.com/news/dow-heading-worst-april-since-175203681.html
- https://markets.businessinsider.com/news/stocks/dollar-decline-raises-concerns-on-its-future-reserve-status-1034605726
- https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/
- https://www.statista.com/chart/34229/additional-reciprocal-tariffs/
- https://www.theglobeandmail.com/investing/markets/stocks/STLA/pressreleases/31968030/tariff-fallout-begins-major-companies-slash-thousands-of-jobs-citing-rising-trade-tensions/
- https://www.csmonitor.com/Business/2025/0421/market-falters-trump-powell-standoff
- https://www.morningstar.com/markets/why-feds-independence-matters-markets-economy-your-wallet
- https://www.bloomberg.com/news/articles/2025-04-22/gold-surges-to-record-as-trump-ramps-up-threats-on-fed-s-powell
- https://finance.yahoo.com/news/jp-morgan-see-gold-prices-192717669.html
