Goldman Sachs Remains Bullish on Gold amid US Tariff Uncertainty

As gold futures reach new records, Goldman Sachs analysts maintain their bullish outlook on the precious metal. The looming potential of US tariffs against Mexico and Canada is cited as a key driver.

"Elevated US policy uncertainty reinforces the role of commodities as portfolio diversifiers," the analysts write. "We continue to value long gold as a hedge against tail risks."

Goldman Sachs identifies tariff escalations and US debt concerns as potential catalysts for higher gold prices. Bullion futures (GC=F) surpassed $2,860 per ounce on Friday, extending their five-week rally.

President Trump plans to impose tariffs on Mexico, Canada, and China by February 1st. These actions could trigger a trade war and affect economic growth.

"Tariff escalations could further boost investor positioning in gold," Goldman analysts predict.

Gold's rise comes despite the Federal Reserve's decision to keep interest rates steady. Lower rates usually hurt the precious metal by encouraging asset purchases.

Year-to-date, gold has gained approximately 6%, following a 27% surge in 2024. Strong demand from central banks and inflows into gold-backed ETFs contributed to the rise.

Goldman analysts reiterate their "highest conviction" recommendation for long gold trades. Their price forecast remains at $3,000 per troy ounce in Q2 2026.

"Structural factors (Central Bank buying) and cyclical factors (ETF buying) continue to drive our bullish outlook," they conclude.