Gold. Photo | courtesy.
Goldman Sachs has raised its end-2025 gold (GC=F) price forecast to $3,700 per ounce, up from $3,300 citing stronger than expected demand from central banks and increased inflows into exchange-traded funds (ETFs) amid rising recession risks.
The bank now projects a trading range of $3,650 to $3,950 per ounce.
“If a recession occurs, ETF inflows could accelerate further and lift gold prices to $3,880 per troy ounce (toz) by year-end,” the bank said on Friday.
“That said, if growth surprises to the upside on reduced policy uncertainty, ETF flows would likely revert to our rates-based predictions, with year-end prices closer to $3,550/toz,” it added.
Meanwhile, the White House has exempted smartphones and computers from “reciprocal” U.S. tariffs. However, President Donald Trump warned that levies are still likely at some point.
Spot gold prices hit another record high on Monday at $3,245.42 per ounce but lacked clear direction as the market absorbed the ongoing tariff developments. [GOL/]
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The bank also increased its central bank demand assumption to 80 metric tons per month, up from 70 tons previously.
Why There’s Uncertainty In Gold Prices
Trump’s blanket tariffs on countries across the globe has sent shockwaves as to whether US dollar will hold as the world’s reserve currency in the long run. This makes gold a go to investment as uncertainty around the dollar persists.
With the fear of recession as a result of Trump’s tariffs, the demand of gold is likely to rise. However, if US ceases its trade war or reaches agreement with world biggest economies like China and European Union, then the rise in gold prices will cease. It’s worth noting that China is the leading gold buyer followed by its neighbor India. The two are at the receiving end of Trump’s tariffs.
