April 2025
Adriaan Pask
Chief Investment Officer, PSG Wealth
Gold prices have climbed to near-record highs above $3 340 in recent weeks, underscoring the metal’s reputation as a traditional hedge against geopolitical and economic uncertainty. This surge has notably benefited the FTSE/JSE All Share Index (ALSI), with a 7% year-to-date gain, driven in large part by strong performances from South African precious-metal miners.
Analysts anticipate gold’s upward trend will endure as long as uncertainty surrounding tariffs and global trade policies persists. Atlanta Federal Reserve Bank President, Raphael Bostic, recently commented that the lack of clarity on tariffs and related policy matters has led to a “big pause” in the US economy. US Federal Reserve Chair, Jerome Powell, also emphasised that the central bank would continue to adopt a cautious approach to interest rates, anticipating that tariffs could contribute to higher inflation and slower economic growth.
Gold remains a favoured asset during periods of global instability and inflation and typically performs well in low interest rate environments. According to the World Gold Council, inflows into Chinese gold-backed exchange traded funds in April 2025 have already surpassed those recorded in the entire first quarter, overtaking inflows into US-listed funds.
Reuters reported that gold has, for the first time in two years, replaced US megacap technology stocks as the world’s most crowded trade, a shift attributed in part to significant bullion purchases from China, which have reinforced the commodity’s appeal as a safe-haven asset.
President Donald Trump said he would soon announce the tariff rate on imported semiconductors, keeping market participants on edge. Meanwhile, investors are closely watching the prospects for renewed US-China trade talks, following indications from China that it is open to negotiations under certain conditions.
The gold price has rallied as investor uncertainty has increased. The uptick also suggests that markets fear a resurgence in inflation, triggered by tariff hikes. Gold has, therefore, proven to be an excellent diversifier in the existing climate and we continue to monitor the merits of the asset class as news unfolds.
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