V Kumar 
(C): Twitter
Last updated on August 13th, 2025 at 10:26 am
When U.S. President Donald Trump announced sweeping tariffs in April 2025 on countries running large trade surpluses, few anticipated the immediate and global domino effect. The policy, framed as an attempt to rebalance American trade interests, triggered a chain reaction, causing gold prices to surge, inflation to creep up across continents, and central banks to scramble for stability.
The tariffs, which ranged from 10% to a staggering 145% depending on the country and product, didn’t just target rivals like China and the EU. Traditional partners such as India and Gulf nations also found themselves in the crosshairs. The world’s investors responded as they always have during uncertainty: they ran for gold.
The rally was both psychological and strategic, central banks accelerated purchases, individual investors hedged against inflation, and markets recoiled from stocks and into commodities.
India felt the blow sharply. With a 15% U.S. tariff on gold jewelry and bullion exports, domestic prices jumped over 3.5% in just two weeks. By mid-May, retail prices hovered around ₹98,680 per 10 grams, fueled not only by tariffs but also by a weakening rupee and festive season demand. While consumers grew cautious, the Reserve Bank of India doubled down on gold buying, a clear signal of mistrust in global currency stability.
The Gulf was not spared either. Dubai’s 24K gold jumped from AED 400.25/g to AED 412.75/g between early May and mid-June. In Saudi Arabia, 24K prices climbed to SAR 409/g, while Qatar’s markets reported similar gains. The impact extended into retail behavior: luxury sales softened, jewelry purchases dipped, and gold imports became pricier.
In East Asia, China responded by reinforcing its bullion reserves as part of a monetary cushion, while its retail gold demand contracted due to high costs. Meanwhile, Russia, already hoarding gold since 2024, ramped up its reserves even further to shield the ruble from global volatility. The EU saw institutional investors pile into gold, particularly in Germany, where reserve expansion was quietly ramped up.
Even countries like Turkey, constantly grappling with lira depreciation, saw locals converting cash into gold at alarming rates, further pushing domestic inflation.
So, while tariffs were launched as a political maneuver, their consequences ran deep. The world’s gold market became the frontline of economic defense, but with it came a surge in inflation, consumer strain, and shifting fiscal strategies. For now, gold remains king, but it’s a reign born of global financial unease.
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