Gold prices shattered all-time highs on Monday, soaring above $3,100 per ounce for the first time amid escalating fears of U.S. trade wars and geopolitical instability.
Spot gold reached $3,128.06/oz (Reuters), $3,106.50/oz (Economic Times), and $3,115.96/oz (Investing.com), while futures touched $3,147/oz. The rally marks gold’s 18–19% gain in 2025, following a 27% surge in 2024.
Key Drivers
1. U.S. Tariff Uncertainty
President Trump’s proposed 25% tariffs on auto imports and April 2 reciprocal tariffs on “all countries” have heightened fears of a global trade war. Analysts warn these measures could trigger stagflation—a scenario historically favorable for gold.
2. Geopolitical and Economic Risks
Escalating tensions in the Middle East and Europe, combined with expectations of Federal Reserve rate cuts, have bolstered gold’s appeal as a hedge against volatility.
3. Central Bank and ETF Demand
Central banks have increased gold reserves to 15% of holdings (up from 7% in 2010), while ETF inflows surged, reflecting institutional confidence in bullion.
Forecasts and Market Sentiment
Major banks have revised price targets upward:
| Institution | 2025 Forecast | 2026 Forecast |
|---|---|---|
| Goldman Sachs | $3,300 | — |
| Bank of America | $3,063 | $3,350 |
| UBS | $3,200 | — |
| Sources: Reuters, Mining.com, Financial Express. |
Analysts at OCBC noted gold’s “constructive outlook” amid trade friction, while Saxo Bank’s Ole Hansen emphasized its role in combating stagflation.
Outlook
Gold’s rally is expected to persist until clarity emerges on U.S. trade policies. While short-term corrections are possible, the metal’s trajectory suggests further gains, with $3,200/oz seen as a near-term target.
As Marex consultant Edward Meir stated, “Tariff issues will continue driving prices higher until there is finality”.
For now, gold remains the go-to asset for investors seeking refuge from macroeconomic turbulence.
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