Gold Soars Above $2,900, Boosted by Tariff Tensions and Bullish Analyst Sentiment
Gold prices surged to a record high on Monday, exceeding $2,900 per ounce, driven by escalating tariff threats and bullish projections from Wall Street analysts.
Escalating Tariff Tensions
President Trump's recent announcement of 25% tariffs on steel and aluminum imports, coupled with potential retaliatory measures from other countries, has sparked concerns among investors. Gold is often seen as a safe haven asset during times of economic uncertainty.
Analyst Projections
Despite the recent correction in stock markets, Wall Street analysts remain optimistic about gold's performance. UBS Global Wealth Management advises allocating around 5% of a balanced portfolio to gold as a hedge against volatility. Goldman Sachs reiterates its bullish stance, citing the persistent threat of tariffs as a catalyst for increased demand.
Central Bank Demand
Gold demand in 2024 reached record levels, largely due to significant purchases by central banks. The World Gold Council attributes this demand to concerns about inflation, geopolitical tensions, and diversification needs.
Bullish Outlook
With tariff tensions showing no signs of abating, analysts expect gold prices to remain supported in the medium term. JPMorgan anticipates a potential correction if tariff uncertainty subsides, but emphasizes that disruptive tariffs continue to fuel a bullish case for bullion.
Year-to-Date Performance
Year-to-date, gold has gained nearly 10%, building on a 27% rise in 2024. Investors continue to seek refuge in gold as a hedge against market volatility and potential economic headwinds.