Gold prices surged to new record highs on Monday, surpassing $3,100 per ounce for the first time, as growing concerns over U.S. President Donald Trump’s tariffs and their potential economic impact, coupled with geopolitical uncertainties, prompted a fresh wave of investments into the precious metal. Spot gold hit an all-time high of $3,106.50 per ounce.
So far this year, gold has surged more than 18%, reinforcing its position as a hedge against economic instability, geopolitical tensions, and inflation. Earlier this month, it had already breached the critical $3,000 per ounce mark, a milestone signaling increasing investor unease about global economic prospects.
Geopolitical Concerns and Tariff Uncertainty
The catalyst for gold’s recent rally is the heightened uncertainty surrounding global trade and tariffs. President Trump’s tariffs, aimed at protecting U.S. industries and reducing trade deficits, have sparked concerns worldwide. These include a 25% tariff on imported cars and auto parts, alongside a 10% tariff on all imports from China. Additionally, Trump has indicated that a new wave of reciprocal tariffs could be announced on April 2, further escalating tensions.
Marex consultant Edward Meir commented, “Tariff issues will continue driving gold prices higher until there is some finality to the tit-for-tat campaign,” suggesting that the uncertainty around trade policies will likely keep gold’s appeal strong as a safe haven.
Central Bank and ETF Demand
Gold’s bullish rally has been supported not just by tariff concerns, but also by substantial demand from central banks and the strong inflow of capital into exchange-traded funds (ETFs). These developments have significantly boosted gold’s value this year, as investors seek to shield themselves from the risks associated with trade wars and inflationary pressures.
OCBC analysts noted, “For now, gold’s appeal as a safe haven and inflation hedge has further strengthened in light of these geopolitical concerns and tariff uncertainty.” They, along with other financial institutions like Goldman Sachs, Bank of America, and UBS, have raised their gold price forecasts for the year.
Revised Price Targets for Gold
Several major banks have updated their projections for gold prices. Goldman Sachs has increased its forecast, predicting gold could hit $3,300 per ounce by the end of the year, up from its earlier target of $3,100. Bank of America now expects gold to trade at $3,063 per ounce in 2025, with a further rise to $3,350 per ounce by 2026, a substantial increase from its previous predictions of $2,750 for 2025 and $2,625 for 2026.
Continuing Rally Supported by Gold’s Safe-Haven Status
Gold’s rise has been fueled by a combination of factors, including its safe-haven status amid escalating geopolitical risk, persistent inflation fears, and robust institutional demand. As tariff concerns and geopolitical tensions continue to mount, the outlook for gold remains bullish, with analysts expecting further price appreciation as long as these uncertainties persist.
In conclusion, as global trade disputes and economic instability continue to dominate headlines, gold is expected to remain a top investment choice for those seeking stability and protection against market volatility. With central bank demand and ETF flows continuing to support the metal, analysts believe gold’s rally could persist through the remainder of the year.
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