Gold prices rose significantly in Asian trading on Thursday, driven by increased demand for the precious metal as a safe haven. This came after US President Donald Trump imposed a 25% tariff on all auto imports, marking another escalation in his tariff-related economic agenda.
In this context, Goldman Sachs raised its forecast for the price of gold by 2025, anticipating a strong increase in demand from central banks and exchange-traded funds. This forecast comes at a time when financial markets have witnessed significant volatility following the imposition of tariffs, adding further pressure to global financial markets.
The Impact of Tariffs on Global Markets
Trump’s tariffs, which will be implemented on April 2, have caused significant turmoil in global markets. This has caused extreme volatility in stock prices on Wall Street and Asian markets, prompting traders to seek a safe haven in gold. With growing concerns about further tariffs being imposed by the United States, gold prices have risen significantly. Meanwhile, spot gold prices rose 0.4% to $3,032.21 per ounce, while May gold futures rose 0.5% to $3,067.42 per ounce. This rise pushed gold close to its current record high, reflecting growing demand for it as a hedge against economic risks.
Gold and Future Trends
Goldman Sachs data showed that demand for gold from central banks will remain high in the coming years. The company also expects continued strong gold buying by major central banks in Asia and emerging markets, supporting future price stability.
With increased inflows into gold-backed exchange-traded funds (ETFs), prices are expected to rise further. In the event of a US recession. These inflows could push gold prices to $3,680 per ounce by the end of 2025.
Gold: A Safe Haven Amid US Trade Concerns
Meanwhile, Goldman Sachs raised its gold price forecast for the end of 2025 to $3,300 per ounce, up from its previous estimate of $3,100. This revision was based on expectations of increased central bank demand for gold over the next three to six years.
Although gold saw profit-taking at the beginning of the week, it remained close to record highs. This is due to uncertainty surrounding trade and economic policies in the United States, which enhances gold’s appeal as a hedge.
Trump’s recent auto tariffs will affect several major economies such as Japan, Europe, and South Korea. These tariffs are also expected to contribute to higher auto prices in the United States, potentially putting pressure on inflation. With growing fears of a deteriorating trade situation, calls for gold investment have increased.
Trump is also expected to announce a set of tariffs on at least 15 major trading partners on April 2. Trump’s threats to impose tariffs on other sectors, such as semiconductors and pharmaceuticals, are increasing anxiety in global markets. Contributing to increased demand for gold as a safe haven.
Precious Metals Outlook
Silver: Silver is another precious metal expected to see increased demand despite the current economic challenges. Given that silver is primarily an industrial metal, demand for it is significantly influenced by growth in the technology and renewable energy industries. Demand for silver in the solar panel industry, for example, is a key driver of future price increases.
With rising industrial demand for silver. In addition to its role as a hedge against economic risk, its prices are expected to remain relatively stable with slight increases in the future. At the same time. The large price differential between gold and silver is prompting some investors to turn to silver as a lower-cost alternative.
Economic and Business Outlook
As for industrial metals, copper prices remained supported by expectations of reduced supply. If Trump imposes tariffs on copper imports, this could directly impact the availability of this metal in the markets. Copper futures rose 0.4% to $9,969.20 per ton on the London Metal Exchange.
With the growing demand for electric motors and cylinders for modern energy technology, this could put pressure on copper supplies, contributing to higher prices. With supply expected to tighten in some markets, especially if the United States imposes tariffs on copper imports as expected, copper prices are likely to see a significant increase.
On the other hand, prices for other precious metals were mixed. For example, platinum futures fell 0.1% to $968.20 per ounce. While silver futures saw a 0.4% increase to $34.345 per ounce. President Trump’s trade policies have led to several shifts in financial markets. Although these policies initially caused some confusion, some have proven effective in strengthening the US dollar. At the same time, they have contributed to increased demand for XAU as a risk hedge.
However, it is important to note that there are several risks that could threaten this rise in gold prices. Strengthening US public finances and declining geopolitical tensions could lead to a decline in demand for gold. However, the current trade situation appears to be set to continue supporting gold prices.
Gold prices continue to rise, supported by global trade and economic tensions. With expectations that gold prices will continue to rise, especially in light of the US President’s tariff policies. The precious metal is one of the most attractive assets for investors at the moment.
