Tariff policies trigger a rush for safe-haven assets, with the king of safe-haven assets, gold, breaking through $3,170! Bulls: Demand continues to grow

The uncertainty caused by U.S. President Trump's tariff stick continues to drive gold, the king of safe-haven assets, to surge. Gold prices broke through $3,170 on Thursday.

Data shows that to hedge against risks, gold perfectly rebounded at the lower edge of a steep trend channel—exactly at the position of the 50-day moving average.

Currently, the gap between non-commercial net long positions in gold and gold prices is rapidly widening.

Financial blog Zerohedge points out that the VIX (Volatility Index) at the current level is almost no longer the "optimal" hedging tool. Gold possesses a similar hedging logic and is even more attractive than fluctuating around VIX 40.

In addition, Peter Schiff, founder and CEO of Euro Pacific Capital and founder of SchiffGold, recently released a video stating that Trump's tariffs are not only ineffective but counterproductive, exacerbating the trade deficit. Amid worsening economic difficulties, the demand for gold is continuously growing, and he advises investors to consider gold as an alternative option for "sound money" and to seek strategic investment opportunities.

After Trump announced a 90-day suspension of tariffs, Schiff stated that this reflects a policy blunder packaged as a victory:

"Today, gold prices rose more than $100 per ounce in a single day. This is the largest single-day dollar increase in gold's history. In fact, gold prices had already risen over $100 before President Trump announced the suspension of the global trade war he initiated last week.

After this news broke, the stock market saw a significant rebound.

Gold initially gave back some of its gains but quickly regained ground, ultimately closing near the day's high, just below $3,100 per ounce... I believe President Trump and his advisors are trying to find a way to both surrender and pretend to be victorious."

Schiff predicts that Trump's tariffs will not only fail to solve America's economic problems but will also have a counterproductive effect. He believes that tariffs will increase the burden on American consumers and businesses, further pushing the U.S. economy toward stagflation:

“While I admire Trump's goals, he is fundamentally incapable of achieving them. In fact, the tariffs he has implemented will backfire, making the U.S. economy less competitive than it was before the tariffs were imposed. And these tariffs will ultimately be paid for by Americans, not by our trading partners. This is not external revenue, but an internal tax.

This tax increase on ordinary Americans will weigh down an already weak economy. Therefore, we will face more severe stagflation.”

He turns his attention to the gold market, pointing out that the deteriorating economic environment and stagflation create highly attractive conditions for gold investment. He is particularly optimistic about the profit prospects of gold mining companies, due to high gold prices and low oil prices:

“This will greatly benefit the second-quarter earnings reports of gold mining companies. Their first-quarter performance will already be good, but I believe the second quarter will be even more astonishing, as I expect gold to hover around $3,100 or higher, while the rebound in oil prices will be relatively slow.

Therefore, during this period, the profits of gold mining companies will be enormous. I have long advocated for people to buy physical gold; when I first started recommending physical gold, the price was less than $300 per ounce, and now it has exceeded $3,000, achieving a tenfold increase.”

Schiff warns that America's reliance on foreign capital makes the unsustainable nature of its living standards increasingly prominent. He predicts that the depreciation of the dollar will force the U.S. to reduce consumption and accept a decline in living standards:

“In fact, it is the U.S. that has been exploiting the world because we rely on the world to overconsume beyond our means.

But the world can only fund our overconsumption by reducing its own consumption. Now, this situation is about to change.

This change will be accompanied by a sharp decline in the dollar. After a significant depreciation of the dollar, our consumption will decrease, while consumption in other parts of the world will increase. This is how our trade deficit will disappear, and it also means that our living standards will decline.

Meanwhile, countries around the world are preemptively selling off dollars in preparation for a significant depreciation of the dollar.”