Gold prices soared to new heights on Monday, crossing the US$3,100 mark for the first time, as geopolitical uncertainties and U.S. President Donald Trump’s tariff policies spurred a fresh wave of investments into the precious metal. Spot gold reached a record high of US$3,106.50 per ounce, continuing its surge amid concerns over the potential economic fallout of the U.S.’s trade policies.
Gold’s Rally Driven by Tariffs and Economic Instability
The recent jump in gold prices reflects a broader trend of economic and geopolitical concerns pushing investors toward safe-haven assets. With trade tensions escalating, particularly between the U.S. and China, and Trump’s tariff policies adding to the uncertainty, investors have turned to gold as a reliable hedge against potential economic instability.
Gold has gained over 18 percent this year, hitting multiple record highs and benefiting from its status as a safeguard against both economic and geopolitical risks. Earlier in the month, the price of gold breached the significant US$3,000 per ounce threshold, marking a milestone that many experts see as a reflection of the growing anxieties surrounding inflation, instability, and trade disputes.
Bank Forecasts Revised Amid Gold’s Stellar Performance
As a result of this rally, multiple major banks have revised their price forecasts for gold. Analysts at OCBC have noted that gold’s appeal as both a safe haven and an inflation hedge has further strengthened due to the ongoing geopolitical tensions and tariff uncertainty.
Goldman Sachs, Bank of America, and UBS have all raised their price targets for the yellow metal. Goldman Sachs now forecasts gold will hit US$3,300 per ounce by the end of 2025, up from an earlier projection of US$3,100. Bank of America has similarly increased its forecast, predicting gold will reach US$3,063 per ounce in 2025 and US$3,350 per ounce in 2026. This is a significant jump from its previous estimates of US$2,750 for 2025 and US$2,625 for 2026.
Trump’s Tariff Plans and Continued Gold Price Strength
Trump has been vocal about his intention to impose additional tariffs to protect U.S. industries and reduce trade deficits. Plans have been floated for a 25 percent tariff on imported cars and auto parts, alongside a 10 percent tariff on all imports from China. A fresh set of tariffs is expected to be announced on April 2. These ongoing tariff issues have been a major driver for gold’s price increase.
Marex consultant Edward Meir emphasized that gold prices are likely to continue rising as long as there is uncertainty surrounding these trade disputes. “Tariff issues will continue driving gold prices higher until there is some finality to the tit-for-tat campaign,” Meir said.
Robust Demand from Central Banks and ETFs
In addition to tariff concerns, other factors contributing to the gold rally include robust demand from central banks and inflows into gold exchange-traded funds (ETFs). Analysts and investment banks believe these factors will continue to support gold’s remarkable price gains this year.
As gold continues to benefit from safe-haven inflows amid global trade tensions and inflationary concerns, the yellow metal remains a key asset for investors seeking protection against economic and geopolitical uncertainty.
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