Gold Prices Surge Amidst Global Uncertainty and Physical Bar Shortages
Gold continues its upward trend, marking its eighth consecutive weekly gain as investors seek solace in the safe-haven asset. Concerns over tariffs, geopolitical risks, and a price disparity between the US and London have driven demand for physical gold into New York vaults.
Spot gold traded near $2,930 per ounce in London, while US futures (GC=F) hovered around $2,950, slightly below their all-time high. Year-to-date, gold has gained approximately 11%.
Continued central bank purchases, geopolitical tensions, and uncertainty surrounding US tariffs have fueled gold's price action. The threat of tariffs extends to the precious metal, potentially reducing its availability.
A significant price difference between US gold futures and the London wholesale reserve has incentivized institutional investors to ship physical gold bars to New York. COMEX gold inventories have surged since November, reaching their highest levels since the pandemic.
Brett Elliott of American Precious Metals Exchange suggests fear of gold shortages could exacerbate the price rally. The Federal Reserve's rate cuts have also supported gold prices, making the non-yielding asset more attractive.
Goldman Sachs analysts have raised their year-end 2025 gold price forecast to $3,100 per troy ounce, citing structurally higher central bank demand. Lina Thomas, Goldman's commodity strategist, anticipates that higher speculative positioning could push prices towards $3,300 if uncertainty persists.
A survey by BofA indicates that global fund managers expect gold to outperform US equities this year, placing behind only global equities. Gold is considered a top-performing asset class in the event of a full-blown trade war.