Gold Surges to Record High as Tariffs Spur Buying
Gold futures (GC=F) soared above $2,900 on Monday, setting a new all-time high, as escalating tariff threats fueled demand.
Tariff Concerns Drive Bullishness
US President Trump's announcement of tariffs on steel and aluminum imports, along with a retaliatory plan against countries imposing levies on US goods, has sparked fears of a potential trade war.
Wall Street Analysts Remain Bullish
Wall Street analysts continue to view gold as a safe haven asset amid rising tariff uncertainty. UBS Global Wealth Management recommends a 5% allocation to gold within a diversified portfolio.
Central Bank Demand Supports Gold
Central banks have been major buyers of gold, with purchases accelerating in the fourth quarter of 2024. Concerns about inflation, geopolitical tensions, and the need for diversification are driving these purchases.
Rate Cuts Boost Physical Gold ETFs
The Federal Reserve's rate-cutting cycle has boosted inflows into physical-backed gold exchange-traded funds (ETFs), further supporting prices.
Gold's Outlook
Analysts predict continued upside potential for gold as tariff uncertainty persists and central bank demand remains high. JPMorgan analysts suggest that gold prices could decline if tariff uncertainty subsides, but expect disruptions to sustain a medium-term bull market.