Gold prices surged to new heights on Thursday as investors flocked to the precious metal amid growing global trade tensions, following U.S. President Donald Trump’s announcement of new tariffs on automobiles.
Spot gold rose by 1.2%, reaching $3,055.87 per ounce by 11:30 a.m. ET, after briefly surpassing a new peak of $3,059.48. U.S. gold futures also climbed 1.5%, trading at $3,068.80 per ounce, hitting an all-time high.
“Gold futures are on track to hit $3,100 soon, with safe-haven buying driving the surge,” said Bob Haberkorn, senior market strategist at RJO Futures. The market’s uncertainty, spurred by Trump’s tariff proposals, is fueling the demand for gold as a secure investment.
Trump’s announcement of a 25% tariff on imported vehicles, due to take effect after reciprocal tariffs are announced, has led to retaliatory threats from global governments, including those in Ottawa and Paris. These tariffs are part of his broader strategy to address the U.S. trade deficit.
In response, global stock markets experienced significant declines, with shares of major car manufacturers suffering heavy losses.
Following the Federal Reserve’s recent decision to keep its benchmark interest rate steady, investors are awaiting the release of U.S. Personal Consumption Expenditures (PCE) data on Friday, which will offer further insight into the likelihood of future rate cuts.
“If the PCE data exceeds expectations, it could provide additional upside for gold, as the Federal Reserve would have more room to lower rates,” Haberkorn added.
Goldman Sachs Raises Price Target Amid Growing Central Bank Demand
As gold reached new heights, analysts at Goldman Sachs revised their year-end price forecast for the yellow metal to $3,300 per ounce. This adjustment reflects a continued increase in gold purchases by central banks, which have bought over 1,000 tonnes of gold annually for the past three years and are on track to do so again in 2025.
Goldman analysts Lina Thomas and Daan Struyven explained that central bank buying—particularly from emerging markets—has surged roughly fivefold since 2022, following the freezing of Russian reserves. The analysts believe this trend represents a long-term shift in reserve management practices, with no immediate reversal in sight.
The revised forecast follows a price target adjustment earlier this year, when Goldman raised its year-end target from $2,890 to $3,100 per ounce in February.
In addition to central bank demand, Goldman noted stronger-than-expected inflows into gold-backed exchange-traded funds (ETFs), driven by renewed investor interest in hedging against economic uncertainties. The analysts reiterated their expectation of two rate cuts from the U.S. Federal Reserve this year.
While ETF flows typically track the Federal Reserve’s policy rates, the analysts pointed out that such flows can sometimes exceed expectations during periods of significant macroeconomic uncertainty, as seen during the COVID-19 pandemic.
If the demand for hedging continues to rise, driving ETF holdings to levels seen during the pandemic, gold prices could reach as high as $3,680 per ounce by the end of the year, Goldman added.
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