Gold prices soared above $3,100 per ounce for the first time, driven by concerns surrounding U.S. President Donald Trump's tariffs and their potential economic fallout, alongside escalating geopolitical tensions. Spot gold reached a record high of $3,106.50 per ounce.
With gains exceeding 18% this year, gold has solidified its status as a hedge against economic and geopolitical instability. Earlier this month, it surpassed the significant threshold of $3,000 per ounce, reflecting deepening economic uncertainties, geopolitical tensions, and inflationary pressures.
The surge in bullion prices has prompted several banks to revise their forecasts for gold this year. Analysts at OCBC noted that gold's appeal as a safe haven and inflation hedge has intensified amid ongoing geopolitical concerns and tariff-related uncertainties.
UBS and other financial institutions have also increased their price targets for gold, with Goldman predicting it will reach $3,300 per ounce by year-end, up from an earlier forecast of $3,100. Bank of America anticipates gold to trade at $3,063 per ounce in 2025 and $3,350 per ounce in 2026, a significant increase from previous projections of $2,750 and $2,625, respectively.
Since taking office, Trump has proposed new tariffs aimed at protecting U.S. industries and reducing trade deficits, including a 25% tariff on imported cars and auto parts, and an additional 10% on all imports from China. A new set of reciprocal tariffs is expected to be announced soon.
Marex consultant Edward Meir indicated that tariff issues are likely to continue driving gold prices higher until a resolution to the escalating trade conflicts is reached. Moreover, robust central bank demand and inflows into exchange-traded funds will further support gold's impressive rally this year, according to analysts and investment banks.