Trump tariffs are the fuel driving gold prices higher. Gold has hit another fresh new all-time high level of $3,080 and is looking to stay strong amid global trade uncertainties. Gold is on track for its fourth consecutive weekly gain and its largest monthly rise since March 2024. Gold recorded an intraday high of $3,086 on Friday.
As the yellow metal achieves a new milestone, buyers appear to be jumping in, putting a test of $3,100 in the near term.
Risk aversion amid rising trade tensions ahead of further US tariffs next week is what is making gold post record highs on daily basis.
The European Union and Canada threatened retaliation after President Donald Trump recently slapped 25% tariffs on vehicles and auto parts made abroad, escalating concerns of a wider trade war and its effects on the world economy.
The latest PCE price index report is to be released today. The Federal Reserve’s chosen measure of inflation is the Personal Consumption Expenditures (PCE) price index, a crucial economic indicator that tracks changes in the costs of goods and services that American consumers buy.
The Fed recently raised its inflation forecast amid concerns about the impact of tariffs, clouding the outlook for further interest rate cuts. However, if PCE comes lower, the Fed may consider cutting rates earlier, pushing the gold price higher.
Gold also rose on strong central bank inflows and rising ETF demand. Central banks have been buying gold in huge quantities for last 2-3 years.
Gold is up over 35% in the last 12 months primarily because of these reasons. If these reasons continue to play out in the future, gold will find support to move higher.
In their most recent commodity analysis, Bank of America analysts revealed that they predict an average gold price of roughly $3,063 per ounce this year, with prices rising to $3,350 in 2026, up from earlier average price forecasts of $2,750 and $2,625 per ounce, respectively. The researchers also predicted that gold prices would rise to $3,500 within two years.
Goldman Sachs Group raised its gold price projection to $3,300 per ounce by year-end, citing higher-than-expected central bank demand and strong inflows into bullion-backed exchange-traded funds.
Gold-backed ETFs are big buyers of gold, as well as backed by interest from institutional and individual investors. Global physically-backed gold ETFs saw significant inflows in February, totalling US$9.4bn, the strongest since March 2022.
Dr. Renisha Chainani, Head – Research at Augmont, says, “Gold active June contract has sustained above $3100 (Rs 89,500) and the next resistance is $3150 (Rs 91,000). Gold currently has the wind at its back. U.S. trade policy, U.S. fiscal policy, geopolitics, and a slowdown in growth are all blowing in the direction of gold.”
In India, the gold price today is Rs 89,150, up by Rs 410 over the previous day’s 24 carat gold rate. Will the price of gold cross Rs 1 lakh in 2025 remains to be seen.
Also Read: Gold hits another all-time high. What is the next level to watch out for?