Gold Price Surges to New High Amidst Geopolitical, Tariff, and US Gold Verification Uncertainty
Gold futures set a new intraday high on Thursday, approaching the $3,000 mark as a confluence of factors, including geopolitical risks, tariff concerns, and speculation over US gold reserves, drove demand for the safe-haven asset.
Escalating Trade Tensions:
President Trump's announced tariffs on autos, semiconductors, and pharmaceuticals stoked fears of an escalating trade war. Wall Street anticipates retaliatory measures from other countries, potentially fueling inflation and further bolstering gold's appeal as a hedge.
Ukraine-Russia Conflict Uncertainty:
Trump's comments suggesting a potential withdrawal of support for Ukraine added to the market's apprehension, increasing interest in gold's safe-haven characteristics.
US Gold Verification:
Trump's statement about verifying US gold reserves at Fort Knox has sparked speculation about a possible revaluation of gold holdings. Such a move could increase transparency and potentially drive up gold prices.
Central Bank Demand:
Goldman Sachs upgraded its year-end 2025 gold forecast to $3,100 per troy ounce, citing structurally higher demand from central banks, particularly China. The firm estimates that this demand will contribute to a 9% increase in the gold price by year-end.
Speculative Positioning:
However, if policy uncertainty, including tariff concerns, persists, speculative positioning in gold may drive prices as high as $3,300 per troy ounce by year-end, according to Goldman Sachs.