Gold Surges Toward $3,400 — Is the Familiar Gold Rush Back Amid Trump’s Tariff Shocks?

TradingKey - With U.S.-China trade tensions resurfacing and the U.S.-EU tariff conflict escalating, global gold prices surged nearly $100 per ounce on Monday, approaching the key $3,400/oz. Analysts believe that a weaker U.S. dollar and policy uncertainty from Washington will continue to support gold’s rally.

On Monday, June 2, gold (XAU/USD) jumped sharply, hitting an intraday high of $3,392.17/oz., and closing up 2.33% at $3,387.51/oz.—its highest close in over three weeks and the largest single-day gain in four weeks. At the time of writing, gold was trading at $3,372.71/oz., down slightly by 0.23% on the day.

Tariff Fears Ignite Gold Rally

The recent surge marked a sharp reversal from the prior two weeks of weakness, as signs of intensifying trade wars reentered the market.

Last Friday (May 30), President Trump accused China via social media of violating the U.S.-China trade consensus. U.S. Trade Representative Jamieson Greer also said China had made slow progress on commitments under the Geneva agreement.

China responded swiftly, calling the accusations baseless and accusing the U.S. of introducing new discriminatory measures against Chinese firms, including AI chip export bans and restrictions on EDA software sales.

Trump has now threatened to double tariffs on steel and aluminum imports from 25% to 50%, prompting strong backlash from the European Union, which warned it may retaliate as early as July 14 or sooner if necessary.

Dollar Weakness Adds Fuel to Gold Fire

A weakening U.S. dollar has also contributed to gold’s rally. On Monday, the DXY U.S. Dollar Index fell 0.65% to 98.71. Morgan Stanley previously forecast that the dollar could fall another 9% by mid-2026, reaching as low as 91 points.

Goldman Sachs recently noted that rising concerns over U.S. fiscal sustainability and Federal Reserve independence have led investors to seek protection through gold amid equity and bond market volatility.

Goldman recommended increasing exposure to gold, suggesting that if worries over U.S. debt and monetary policy intensify, private investor demand could push gold prices well beyond its current year-end target of $3,700/oz. in 2025.

Long-Term Outlook: Gold as a Hedge Against “Sell America”

Besides strong central bank buying and inflation rebound expectations, analysts pointed out that the ongoing “sell America” investment trend is likely to provide sustained tailwinds for gold—positioning bullion once again as a safe haven asset during periods of geopolitical and economic uncertainty.