Gold Surges Amidst Geopolitical Tensions and Trade Uncertainty
Gold prices continue to rise, marking their eighth consecutive weekly gain as investors seek safe-haven assets. The threat of tariffs and a price spread between the US and London markets is incentivizing the shipment of physical gold bars into New York.
Current Gold Prices
As of 4:51:06 PM EST, gold futures (GC=F) are trading near $2,950, slightly below the all-time high set on the previous session. The spot price in London, representing the wholesale reserve price, is hovering around $2,930 per ounce.
Factors Driving Gold's Rise
* Central Bank Demand: Central bank buying has been a significant factor in gold's recent price surge, reaching an all-time high in the fourth quarter of 2023. China remains the largest gold buyer, contributing to structurally higher demand.
* Geopolitical Uncertainty: Tensions between Ukraine and Russia, as well as the possibility of broad-based tariffs on goods, are creating uncertainty and increasing demand for gold as a safe-haven asset.
* Pricing Disparity: A larger-than-normal price difference between gold futures in the US and the spot price in London has prompted institutional investors to ship more physical gold to vaults in New York. This has elevated gold inventories on COMEX since November.
Analysts' Predictions
Goldman Sachs has raised its year-end 2025 gold price forecast to $3,100 per troy ounce, citing higher central bank demand. They estimate this will add 9% to the gold price by year-end. However, if policy uncertainty and tariff fears persist, gold prices could potentially reach $3,300 per troy ounce.
Performance Outlook
Global fund managers surveyed by BofA believe gold will outperform US equities and rank as the second-best-performing asset class in 2025. In the event of a full-blown trade war, gold is expected to perform better than the US dollar or 30-year bonds.