In 2025, the global market once again faces the “Trump variable.” A new round of tariff policies has struck like a thunderclap, not only shaking the fragile global supply chain but also causing immense anxiety for investors seeking to preserve their assets. Against this backdrop, the interplay between Trump’s tariffs and precious metals has become a market focus, especially the price trends of gold and silver. This article will provide an in-depth analysis of the nature of this tariff shock, explain why safe-haven precious metals like gold and silver have become highly sought-after in chaotic times, and offer you a practical 2025 investment strategy to help you stand firm in a volatile market.
With the Trump administration’s announcement in February 2025 of tariffs up to 25% on imported automobiles, the trade war dubbed “America First 2.0” has officially been ignited. Compared to the 2018 steel and aluminum tariffs, this impact is different in both breadth and depth, directly striking at the very core of global manufacturing.
The complexity of the automotive supply chain far exceeds that of raw materials like steel and aluminum. A single car is composed of tens of thousands of parts, with a supply chain spanning the globe. According to Reuters data, a significant proportion of U.S. auto imports come from trading partners like Mexico and Canada, while German and Japanese automakers also have a very high rate of setting up factories on U.S. soil. A 25% tariff acts like a scalpel, precisely cutting into the most intricate links of the global division of labor, forcing multinational corporations to immediately re-evaluate production layouts established over decades. The ripple effects are far beyond expectations.
The Trump administration has once again bypassed the World Trade Organization (WTO) framework to implement unilateral tariffs, posing another challenge to the post-war international trade order. Historical data shows that during the last tariff war against China, global companies’ costs increased by 12-15% due to supply chain adjustments. This time, the auto tariffs have a broader impact and could accelerate the formation of “customs unions” and “non-tariff barriers,” risking the fragmentation of the global economic and trade landscape.
Ultimately, consumers will bear the cost of tariffs. The White House projects that this round of tariffs will cause new car prices in the U.S. to rise by 6-8%, undoubtedly exacerbating inflationary pressures. More problematically, this puts the Federal Reserve in a dilemma. If inflation remains high as a result, the market’s anticipated room for interest rate cuts will be severely compressed, and the Fed might even be forced to adopt a more contractionary monetary policy, creating a double-whammy of “tariffs pushing up inflation, rate hikes hitting the economy.” This uncertainty is the fundamental reason why capital is flowing into the precious metals market under the influence of Trump’s tariffs.
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Under the shadow of trade conflicts, the precious metals market has shown strong appeal. This is not just driven by traditional safe-haven sentiment, but also a harbinger of profound changes in the global monetary system. The spot gold price in London breaking the $2,700 per ounce mark illustrates that the market is repricing for a high degree of future uncertainty.
The market’s direction is often dictated by the most astute institutional capital. Data shows a significant increase in open interest for gold futures on the New York Mercantile Exchange (COMEX), while the implied volatility for silver futures has also climbed to an annual high. This indicates that professional investors are actively building positions in preparation for potential sharp market fluctuations. Several consecutive weeks of net inflows into gold ETFs further reinforce this trend, showing that the safe-haven move into precious metals has shifted from a tactical choice to a strategic allocation.
When the situation is unclear, the actions of central banks are the most indicative. A World Gold Council report points out that global central banks have added over a thousand tons of gold to their reserves in the past year, a new high since the collapse of the Bretton Woods system. The signal behind this is clear: as the credibility of global currencies faces challenges and geopolitical risks rise, the strategic value of gold, as the ultimate reserve asset transcending sovereign credit, is returning.
Compared to gold, silver’s performance is even more compelling. It not only possesses the safe-haven properties of a precious metal but is also supported by strong industrial demand. With the global emphasis on green energy, the demand for silver paste in the solar photovoltaic and electric vehicle sectors continues to grow. It is projected that industrial silver demand will account for more than half of the total demand by 2025. This dual attribute of “financial safe-haven” plus “essential industrial demand” allows silver to play a unique balancing role in an investment portfolio, and its price elasticity may surpass that of gold during certain periods.
Faced with structural shifts, investors need to establish a multi-layered response framework. The impact of tariff policies is often “short-term shock, long-term adjustment,” which means we need both defensive allocations and an eye for the structural opportunities they contain.
For most investors, allocating 5-10% of assets to gold is a prudent choice. Physical gold offers the ultimate protection, while gold ETFs (like GLD, IAU) provide excellent liquidity and convenience. You can adopt a “core position + dynamic adjustment” model, moderately increasing your allocation when market panic intensifies, and taking some profits when risk sentiment eases.
If you can tolerate higher risk, shares of gold mining companies (e.g., Newmont, Barrick Gold) offer potential leverage. When the price of gold rises, the profit growth of mining companies often outpaces the rise in the gold price itself. However, this also means higher volatility, as they are affected by multiple factors such as operating costs, management capabilities, and even geopolitical issues at mine sites.
There are always new opportunities in a crisis. Trump’s tariff policy is forcing a restructuring of global supply chains. Some Southeast Asian countries with manufacturing strength (like Thailand, Vietnam) may benefit from this, becoming destinations for supply chain relocation. Keeping an eye on the manufacturing export data and related industry ETFs in these regions could be the next market focus.
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To predict the price trends of gold and silver, we need to find patterns from history and analyze them in the context of the current macroeconomic environment. Trump’s tariff policy is not an isolated event; it is closely linked to the monetary policies of global central banks, which together shape the price outlook for precious metals.
Looking back at the 2018-2019 U.S.-China trade war, the market was similarly filled with uncertainty. After an initial period of volatility, the price of gold began a bull run that lasted for nearly two years. The backdrop at that time was the Federal Reserve’s pivot from raising to cutting interest rates. Today, global debt levels are much higher than in 2018, and the market’s tolerance for policy shocks is lower. This suggests that the safe-haven demand triggered by this round of tariffs may be more sustained and intense than before.
The European Central Bank’s surprise interest rate cut in early February was interpreted by the market as a “precautionary” measure against potential trade shocks. Such divergence in monetary policy among major economies often exacerbates volatility in the foreign exchange market. If the U.S. is forced to maintain high interest rates due to inflationary pressure while other economies move toward easing due to recession risks, a strong U.S. dollar could pressure gold prices in the short term. However, in the long run, the expectation of global monetary easing and widespread concern about the credit of sovereign currencies remain the strongest arguments supporting investment in precious metals.
Because the auto industry is the ultimate expression of globalized division of labor. U.S. imports of cars and parts are highly dependent on North American trade partners (Mexico, Canada), and the production capacity of German and Japanese automakers in the U.S. is also crucial. A 25% high tariff will directly disrupt the existing efficient division of labor, forcing companies to undertake extremely costly production line relocations and reorganizations, with an impact far exceeding that of tariffs on single raw materials.
The key is the expectation of an “inflationary spiral” triggered by the tariffs. The tariffs drive up prices, which in turn reduces the Federal Reserve’s room to cut interest rates, leading to increased market fears of “stagflation.” In this environment, gold’s anti-inflation and value-preserving properties become prominent. At the same time, silver is additionally supported by industrial demand, creating a dual driver of “safe-haven + industrial” demand.
The most direct way is to buy gold ETFs (like GLD) or silver ETFs (like SLV) through a brokerage account. If you want to hold physical metal, you can consider a gold passbook account at a bank or reputable gold dealers. For investors with a higher risk tolerance, you can research gold mining stocks or use Contracts for Difference (CFDs) for leveraged trading, but be sure to manage your risks carefully.
As Trump’s tariff hammer swings again, the global economic and trade order is being rewritten. This is a headwind for most assets, but for precious metals, it’s a tailwind that highlights their intrinsic value. From hedging against inflation and geopolitical risks to serving as a cornerstone in the restructuring of the global monetary system, the synergistic effect of Trump’s tariffs and precious metals may have only just begun. As experienced investors, we cannot control the changing winds of macroeconomic policy, but we can choose to anchor a portion of our assets in the safest harbor. In the variable year of 2025, understanding and skillfully using precious metals—an asset that transcends cycles—will be a key step in building a robust investment portfolio.
