by Paul Wong, Sprott:
Key Takeaways
- Market turbulence in response to the Trump administration’s tariff actions is delivering a clear verdict: global investors are losing faith in the U.S. financial architecture, which no longer looks reliable.
- Gold is a major beneficiary of these events. While U.S. equities, bonds and the U.S. dollar were falling simultaneously in April, a phenomenon not seen since the 1970s, gold hit an all-time high, reaching $3,500, and its monetary appeal continues to grow.
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- We believe the decline of the U.S. dollar is driving the emergence of a multi-asset reserve system, which will likely need a widely accepted, neutral reserve asset as its key reference point. Gold is uniquely suited to this role.
Performance as of April 30, 2025
| Indicator | 4/30/2025 | 3/31/2025 | Change | Mo % Chg | YTD % Chg | Analysis |
| Gold Bullion1 | $3,288.71 | $3,123.57 | $165.14 | 5.29% | 25.31% | Gold touched $3,500, support ~$3,200 |
| Silver Bullion2 | $32.62 | $34.09 | $(1.47) | -4.31% | 12.85% | Silver’s industrial value > monetary value |
| NYSE Arca Gold Miners (GDM)3 | 1,377.21 | 1,288.51 | 88.70 | 6.88% | 43.97% | GDM breakout past 2020 high |
| Bloomberg Comdty (BCOM Index)4 | 100.93 | 106.40 | (5.47) | -5.14% | 2.19% | Global recession tariff threat hitting |
| DXY US Dollar Index5 | 99.47 | 104.21 | (4.74) | -4.55% | -8.31% | DXY breaking multi-year support |
| S&P 500 Index6 | 5,569.06 | 5,611.85 | (42.79) | -0.76% | -5.31% | Wild volatility, +15% range |
| U.S. Treasury Index | $2,372.05 | $2,357.12 | $14.93 | 0.63% | 3.57% | Volatile month, see comment section |
| U.S. Treasury 10 YR Yield* | 4.16% | 4.21% | (0.04) | -4 BPS | -41 BPS | Volatile month, see comment section |
| Silver ETFs** (Total Known Holdings ETSITOTL Index Bloomberg) | 736.19 | 719.79 | 16.40 | 2.28% | 2.79% | Potential large base building |
| Gold ETFs** (Total Known Holdings ETFGTOTL Index Bloomberg) | 88.90 | 87.98 | 0.92 | 1.04% | 7.30% | ETF buyers returning slowly vs. gold price |
Source: Bloomberg and Sprott Asset Management LP. Data as of April 30, 2025.
* BPS stands for basis points. **ETF holdings are measured by Bloomberg Indices; the ETFGTOTL is the Bloomberg Total Known ETF Holdings of Gold Index; the ETSITOTL is the Bloomberg Total Known ETF Holdings of Silver Index.
Gold Market: Structural Tailwinds Intact
Spot gold soared by $165.14 per ounce (or 5.29%) in April to close the month at $3,288.71. Gold has risen each month in 2025, and by the end of April, it had increased 25.31% year-to-date. Gold had a wide trading range in April after briefly selling off along with most other assets in a systemwide financial degrossing and deleveraging selling event. Gold reached a closing low of $2,983 in April before rallying to touch $3,500 in overnight Asian trading on April 22 as U.S. financial assets came under enormous stress.
Gold’s 25% YTD climb highlights its strength amid a volatile landscape of tariffs and potential stagflation.
The volatile month of April began with President Trump’s announcement of “Liberation Day” tariff rates, which shocked the markets with their extremely draconian levels and nonsensical calculation methods. Markets swiftly sold off as the global economic consequences of such high tariff rates became evident. Selling and related hedging overwhelmed available market liquidity, causing extreme pricing dislocations across all asset classes.
However, the most troubling development was the simultaneous decline in U.S. long-dated bond prices, U.S. equities and the U.S. dollar. This had the markings of an emerging market facing capital flight. During this selling event, gold rose by over $400 per ounce as safe-haven flows dominated trading. On April 9, less than a day after implementing the reciprocal tariff portion, Trump announced a 90-day pause. At that point, the U.S. bond market was distressingly close to seizing up in a way last seen in the 2008 global financial crisis (GFC) and the 2020 COVID-19 pandemic meltdowns.
The Trump administration followed up this announcement of the 90-day pause with a brief threat to terminate Federal Reserve Chairman Jerome Powell. Since then, the administration has been steadily walking back its harsher rhetoric, talking up potential trade deals and downplaying threats to Fed independence. In response, equity markets have rallied and were back to their April 2 pre-reciprocal tariff levels by the end of April.
The April 22 gold high of $3,500 was followed by a sharp drop that sparked algorithmic selling from leveraged speculators on Shanghai’s futures exchange. However, physical demand from Chinese gold ETFs (exchange traded funds) surged in April, accounting for over half of global ETF inflows. In the U.S., managed-money positioning is flat following forced deleveraging in early April, leaving little incremental supply from that cohort. We see support around $3,200 as gold’s structural tailwinds remain intact. In our view, these include a worsening U.S. fiscal deficit situation, U.S. dollar weakness, rising long-bond yields and stagflation7 pressures from the extreme tariff regime. As shown in Figure 1, gold remains in a well-defined uptrend with positive confirmation from the technical indicators.
Figure 1. Gold’s Well-Defined Uptrend (2019-2025)
Source: Bloomberg. Gold bullion spot price, US dollar/oz. Data as of 4/30/2025. Moving average convergence/divergence is a trend-following momentum indicator that shows the relationship between two exponential moving averages (EMAs). Past performance is no guarantee of future results.
As America’s Financial Pillars Shake, Gold Soars
The market turbulence that began in early April and the White House’s subsequent 90-day “pause” on new reciprocal tariffs initially seemed to tell two different stories. First, outright panic by investors, then a sharp relief rally. Both episodes delivered the same verdict: global investors are losing faith in the U.S. financial architecture that has been seen as reliable for decades. For the first time since 1977, U.S. equities, U.S. Treasury bonds and the dollar fell together, while gold vaulted to record highs. What was once a stable pattern of flight to quality in U.S. assets has flipped. We believe this inversion is a warning sign that something fundamental has changed.
