Gold prices in Taiwan soared to an all-time high of NT$3,518 (US$108.20) per gram at noon on Thursday, according to the Bank of Taiwan. This record-breaking figure marks a 25.6% increase since the beginning of the year, driven by escalating geopolitical tensions and growing economic uncertainty, especially surrounding the ongoing trade war between the United States and China.
📈 What Is Driving the Surge in Gold Prices?
The Bank of Taiwan attributed the sharp rise to multiple global factors, which reflect a broader flight to safety by investors:
- U.S.-China Trade War Escalation
With the U.S. imposing a new wave of tariffs on Chinese goods and China threatening retaliatory measures, global markets have turned risk-averse. Investors are seeking safer assets—particularly gold, which is traditionally seen as a hedge during times of economic uncertainty. - Weakened U.S. Dollar
The U.S. Dollar Index has shown significant declines recently. A weaker dollar often boosts gold prices, as it becomes cheaper for non-dollar investors to buy gold, increasing demand. - Central Bank Policies and Structural Allocation Shifts
Central banks around the world have been increasing their gold reserves, and in China, regulators recently approved insurance fund investments in gold. These shifts suggest a long-term institutional shift toward gold as a store of value, boosting demand. - Geopolitical Risks and Inflation Fears
Ongoing conflicts in various regions, concerns about inflation, and fluctuating interest rate expectations have all made gold a more attractive option for wealth preservation.
💬 UBS and Other Analysts Predict Further Gains
UBS Wealth Management’s Chief Investment Office has now raised its 12-month price target for gold to US$3,500 per ounce, citing:
- Tariff escalations
- Rising inflation expectations
- Increasing geopolitical tension
- Central banks’ demand for gold
- Policy uncertainty around interest rates
These developments may signal sustained demand growth, with Taiwan’s market closely tied to these global trends.
🌏 Implications for Taiwan’s Economy
The surge in gold prices has multiple implications for Taiwanese investors and policymakers:
- Safe Haven Behavior: Retail and institutional investors may increasingly divert funds from volatile assets into gold, reducing participation in local equity markets.
- Currency and Trade Pressure: With export-heavy industries already affected by tariffs, a volatile global currency market can complicate Taiwan’s trade dynamics further.
- Inflation Hedge: Rising gold prices could also signal growing domestic inflation concerns, especially as energy and commodity prices fluctuate.
📌 FAQs
Why did gold prices reach record highs in Taiwan?
Due to increased demand driven by U.S.-China trade tensions, a weakening U.S. dollar, geopolitical instability, and rising inflation concerns.
How much has gold increased in Taiwan since the start of 2025?
As of Thursday, gold prices in Taiwan are up 25.6%, rising from NT$2,801 to NT$3,518 per gram.
What does this mean for Taiwanese investors?
Many are shifting toward gold as a hedge against economic risk, inflation, and currency volatility.
Will gold prices continue to rise?
Analysts, including UBS, predict further increases, with a 12-month target of US$3,500 per ounce, depending on geopolitical developments and monetary policy trends.
What’s the global significance of Taiwan’s gold price surge?
It reflects broader global patterns of financial risk aversion, aligning with investor behavior in other major markets.
