Gold Prices Soar to Record Highs Amidst Global Uncertainty and Trade Tensions
Gold has reached unprecedented levels, propelled by geopolitical risks, escalating trade tensions, and hints from President Trump regarding the verification of US gold reserves.
On Thursday, gold futures (GC=F) surged to an intraday high of $2,973 per ounce before retracing slightly. The cash market price surpassed a record $2,954 an ounce.
Concerns over a widening trade war, sparked by President Trump's announcement of new tariffs on autos, semiconductors, and pharmaceuticals, have contributed to the surge in gold prices. Analysts expect retaliatory measures from other countries to fuel inflation and drive investors towards safe haven assets, including gold.
Uncertainty surrounding the ongoing conflict between Ukraine and Russia has also pushed the price of bullion higher. Trump's recent statements, suggesting a possible withdrawal of support for Ukraine, have further fueled market anxiety.
President Trump's remarks about verifying the gold reserves at Fort Knox have added to the speculation surrounding higher gold prices. Market participants anticipate a potential revaluation of US gold reserves, which could increase transparency and boost gold prices.
Goldman Sachs has revised its gold price forecast for 2025 to $3,100 per troy ounce, citing higher central bank demand, particularly from major consumer China.
"Structurally higher central bank demand will add 9% to the gold price by year-end," said Goldman commodity strategist Lina Thomas. "However, policy uncertainty, including tariff fears, could lead to speculative positioning and push gold prices as high as $3,300/toz by year-end."