After sidestepping two recessions in 2023 and 2024, the U.S. economy now faces a third and perhaps more complex challenge: unpredictable trade policies, rising tariffs, and weakening consumer demand.
While job growth remained steady in May with 139,000 jobs added and unemployment hovering around 4.1%, signs of underlying strain are emerging — prompting a growing number of investors to turn to gold as a hedge against uncertainty.
Business leaders across the country are pressing pause on hiring and capital expenditures as they try to anticipate the next wave of tariff announcements from President Donald Trump. John Starr, CEO of UltraSource, a Kansas City-based manufacturer of meat-processing technology, said he is deferring $20 million in orders due to new 10% tariffs on imported machinery — a move that could cost him $2 million in profit.
“I have to take action now,” Starr told The Wall Street Journal. “We’re going to be very careful about any cash expenditure just because we need that cash to pay the tariff.”
While the White House defends its approach as a long-term play to realign global trade and incentivize domestic production, the short-term fallout is rippling across sectors. Manufacturers dependent on imported components, such as steel, aluminum, and semiconductors, are facing unanticipated costs. Some, like Starr, say they’d accept stable tariffs — if only they could plan around them.
That volatility is beginning to impact the broader economy. The Federal Reserve, which cut rates last year to support growth, has hit pause in 2025 over concerns that tariffs could spark another round of inflation. Long-term borrowing costs remain elevated, weakening credit conditions for households and businesses. In April, consumer credit surged by nearly $18 billion, far exceeding expectations as more Americans turned to borrowing to keep up with rising prices.
Housing, meanwhile, has gone cold. According to Redfin, the U.S. housing market now has nearly 500,000 more sellers than buyers — the largest gap since 2013. Economist Chen Zhao forecasts home prices could fall 1% in 2025. That, combined with rising delinquencies on auto loans and credit cards, has raised fresh fears of a slowdown in consumer spending.
Despite these pressures, gold has remained a bright spot. Its value is holding firm as uncertainty rattles traditional markets. For investors wary of volatile equities, rising debt levels, and geopolitical shocks, gold continues to serve as a time-tested store of value.
“We know that U.S. and Chinese negotiators have agreed on a 'framework', but until Trump or Xi approves them, uncertainty lingers. And that uncertainty is supporting gold heading into the inflation figures,” said Matt Simpson, a senior analyst at City Index.
The Fed’s Beige Book, released last week, found signs of softening labor demand, hiring pauses, and declining overtime across several districts. Economists warn that even a modest uptick in layoffs could trigger a broader employment contraction. “It starts with one large firm,” said Gregory Daco, chief economist at EY. “Then competitors might say, ‘Well, we have to do the same.’”
In the meantime, consumers continue to spend, but cracks are showing. PYMNTS data reveals that paycheck-to-paycheck households are increasingly relying on credit, while lenders are tightening approval standards due to tariff exposure and overall economic uncertainty.
What happens next depends largely on the president’s next move. While some analysts argue that a de-escalation of tariffs could extend the recovery by several years, others warn that continued trade upheaval could drag the economy into contraction.
In either scenario, gold’s resilience continues to stand out. As markets weigh conflicting signals — from steady job growth to rising financial stress — investors seeking stability are moving toward tangible, politically neutral assets.
A Strategic Move for Today’s Market
At Reagan Gold Group, we help investors hedge against economic and political uncertainty with IRS-approved physical gold and silver IRAs, as well as secure direct delivery options. When tariffs, inflation, and policy unpredictability put your wealth at risk, gold offers peace of mind that endures.
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