Gold prices briefly fell sharply last week, when stock markets came under pressure, falling below $3,000 an ounce, from then-record highs near $3,170.
Gold prices saw strong buying when declining, with spot prices rising to record highs of around $3,315 on Wednesday, amid a renewed deterioration in risk appetite.
Strong demand for gold also points to declining confidence in the dollar.
The immediate catalyst appears to be renewed concerns about the US-China trade war, and the administration’s decision to open an investigation into imports of base metals.
Societe Generale expects near-term gains, reaching $3,345 and $3,370.
Goldman Sachs raised its year-end gold price forecast to $3,700 an ounce, from $3,300, citing stronger-than-expected demand from central banks and rising recession risks affecting ETF flows.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, commented: “There are no signs of a breakthrough in Trump’s trade war after the President ordered an investigation into base metals, semiconductors and pharmaceuticals, sparking a new wave of safe haven and stockpile disposal”.
According to the bank, “the growing risk of a deeper recession, a new shift in the geopolitical landscape, disruptions to global supply chains, and fears of rising inflation, coupled with changing interest rate expectations, suggest that gold will remain strong for the foreseeable future.”.
Commerzbank also expects strong core support; “The rise in the price of gold is partly in line with the continued weakening of the dollar, suggesting a gradual erosion of the greenback’s position as a safe haven asset – and gold is likely to be an alternative for many USD investors. Recent strong inflows into the world’s largest gold ETF could indicate that as well.”
Gold continues to fly amid trade tensions, support expectations
The price of the precious metal has risen 26% this year, recording a series of record highs, amid an escalating trade war that raises concerns of a possible global recession, and with investors unable to obtain long-term investment positions due to the unpredictability of tariff announcements from Washington.
Evie Hambro, head of global investment at BlackRock, said on Bloomberg TV: “I wish I had one pound for every time the price of gold is said to have hit a record high over the last few weeks.” “The gold market is booming somewhat in this period of uncertainty, but the foundations of this boom are very concrete and realistic.”
Leading banks remain optimistic about bullion prospects in the coming quarters, as investors increase their holdings in gold-backed index funds and central banks continue to accumulate the metal. Goldman Sachs expects prices to rise to $4,000 an ounce by mid-2026.
This week, the administration also announced investigations into imports of semiconductors and medicines, following sector-specific tariffs on steel, aluminum, automobiles and auto parts. It also said it was negotiating with dozens of other trading partners to lower trade barriers in exchange for higher tariff relief.
ANZ also expects the six-month price of gold at $3,500 and an end-of-year target of $3,600.
Luqin Wang, an analyst at Shanghai-based Galaxy Futures, said: “The struggle for influence between major countries will continue.” “Gold’s safe-haven appeal means it is likely to rise rather than fall in the near to medium term.”
Traders are also betting that the Federal Reserve will make at least three rate cuts this year. Monetary easing is generally positive for the precious metal.
XAU hits new highs supported by demand and a weak dollar
Gold rose 2.4% to $3,308.04 an ounce as of 10:26 a.m. London time, after earlier hitting a record high of $3,317.75. The Bloomberg Spot Dollar Index fell 0.5%. Silver rose, while platinum and palladium were little changed.
To be sure, there is further evidence of the strength of Chinese demand.
According to Bloomberg data, for example, inflows to China’s four major gold ETFs reached a record high of about 3 billion yuan (US$410 million) on Thursday.
Gold rose to a new record high thanks to safe-haven demand, with the dollar falling and technology stocks tumbling after U.S. President Donald Trump ordered an investigation that could open a new front in the global trade war.
The price of bullion rose 2.7% on Wednesday to surpass $3,300 an ounce for the first time, surpassing the previous record set on Monday. The dollar fell to a six-month low as traders were again affected by a series of tariff-related headlines as Trump launched an investigation into the need for tariffs on key metals.
Gold briefly pared gains, and copper rose following a report that China would open up to trade talks with the United States if it appointed a representative, and showed respect by reining in offensive remarks, according to a person familiar with the Chinese government’s thinking.
Meanwhile, silver hit a high of 96,965 rupees per kilogram, an increase of 2.31%. By 2:45 p.m., it had fallen to Rs 96,500, previously hitting a low of Rs 94,666.
One reason for this was the 0.65% depreciation of the US dollar, according to data from Bloomberg’s Spot Dollar Index.
