Gold prices continued their impressive surge on Monday, surpassing the $3,100 per ounce mark and setting a new record high. This significant rally has been driven by growing uncertainty surrounding tariffs, which are expected to stoke inflation and potentially hinder economic growth. The metal’s stellar performance has positioned it for its strongest quarter since 1986, a testament to its growing status as a safe-haven asset in uncertain times.
Spot gold surged 1%, reaching $3,116.94 per ounce by 1:44 p.m. ET (1744 GMT), having touched an intraday high of $3,128.06 earlier in the day. U.S. gold futures climbed 1.2%, closing at $3,150.30. The continued upward trajectory of gold has been fueled by concerns over the U.S. administration’s trade policies and their potential economic impact.
The Driving Forces: Tariffs and Inflation Fears
David Meger, director of metals trading at High Ridge Futures, attributed the rally to ongoing uncertainty around tariffs, which has been affecting equity markets and pushing investors towards gold. “The ongoing uncertainty regarding tariffs has affected equity markets and brought another round of safe-haven buying into the gold market,” said Meger. He noted that while there are certain resistance levels that could cause a temporary pullback or profit-taking, the broader bullish trend remains intact.
The U.S. President, Donald Trump, is expected to announce reciprocal tariffs on April 2, with automobile tariffs set to take effect on April 3. These tariff actions have added to the anxiety surrounding the trade war, fueling demand for gold as a protective measure against economic instability.
A Stellar Performance
Gold has gained around 18% so far this year, after a robust 27% rise in 2024. This surge is underpinned by several key factors, including a favorable monetary policy environment, strong central bank buying, and an uptick in demand for exchange-traded funds (ETFs) that track the precious metal. Analysts believe these factors will continue to support gold’s upward momentum in the months ahead.
Despite its impressive gains, gold’s technical indicators suggest it is entering overbought territory. The Relative Strength Index (RSI) for gold is currently above 77, indicating that the market is potentially overheated. However, experts acknowledge that the strong momentum in gold prices has defied traditional market logic, with many attributing this to the ongoing uncertainty and global economic factors at play.
Optimistic Price Forecasts
Goldman Sachs has raised its outlook on gold prices, predicting that the metal could surpass $4,500 per ounce within the next 12 months, especially if market conditions remain extreme. “There are signs of strong Chinese buying activity that are flowing through,” said Daniel Ghali, commodity strategist at TD Securities. “We expect the continued uncertainty with respect to Trump’s trade policy to fuel macro funds to purchase more gold.”
This is a sentiment echoed by other Wall Street big banks, which have raised their price targets for gold, citing the impact of trade-war tensions and strong central bank demand.
Performance of Other Precious Metals
While gold continues its record-breaking run, other precious metals have also shown positive movement. Spot silver fell 0.6% to $33.90 an ounce, though it remains on track for a monthly gain. Meanwhile, platinum rose 0.5% to $996.20, and palladium gained 1.2%, reaching $982.94. Despite these gains, silver has struggled to fully capitalize on gold’s rally, reflecting a more idiosyncratic strength in gold rather than weakness in silver prices, according to Ghali.
Conclusion
Gold’s surge to over $3,100 per ounce highlights its status as the preferred safe haven in times of uncertainty. With trade tensions, inflation fears, and geopolitical risks continuing to dominate the global landscape, gold is poised to maintain its bullish trend. Analysts are optimistic about its future, with some forecasting even higher prices in the coming months, as demand from both central banks and retail investors remains strong. The combination of macroeconomic uncertainties and gold’s unique position as a store of value makes it a critical asset in the current market environment.
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