Leading global banks are optimistic about gold prices remaining high in 2025, possibly hitting $3,000, as geopolitical uncertainties influence investor sentiment. Key drivers include U.S. President's assertive trade policies towards major partners like Canada, Mexico, and China, sparking retaliatory actions.
In reaction to these dynamics, Citi has adjusted its short-term price target for gold to $3,000 per ounce from $2,800, maintaining the 6-12 month forecast at $3,000. The bank has also upgraded its 2025 average price projection from $2,800 to $2,900 per ounce.
Citi's note suggests, "The gold bull market seems likely to persist under Trump 2.0, fueled by trade disputes and geopolitical tensions, reinforcing the trend toward reserve diversification and de-dollarization." The expectation is for gold to serve as a hedge against various risks, such as trade wars, growth concerns, interest rates' impact on growth, labor market conditions, currency devaluation risks, and potential equity downturns.
The World Gold Council reported a 1% increase in global gold demand to a record 4,974.5 metric tons in 2024, propelled by heightened investment and central bank acquisitions in the last quarter.
Macquarie's outlook highlights the importance of U.S. fiscal, trade, and immigration policies in shaping future gold performance beyond the first half of 2025, stressing the significance of tariff responses.
Gold surged to a new peak of $2,882.16 recently, driven by escalating trade tensions, economic growth concerns, and uncertainty regarding the Federal Reserve’s interest rate trajectory.
End-of-period forecasts for gold prices in 2025 and 2026 (in $ per ounce) are available from various brokerages.