Gold surged on Monday to trade past $2,900 to a new record as escalated tariff threats spurred buying and Wall Street analysts remained bullish on the safe haven asset.
Gold futures (GC=F) climbed more than 1.6% to roughly $2,935 after hitting all-time highs last week.
Over the weekend President Trump announced he will introduce that he will introduce 25% tariffs on all imports of steel and aluminum into the United States on top of existing duties.
On Friday the President also said he will unveil a retaliatory tariff plan this week against countries which impose levies on US goods. Meanwhile, last Tuesday, 10% tariffs went into effect on select Chinese goods.
Wall Street analysts have stayed bullish on gold amid rising tariff threats.
«We continue to see gold as an effective portfolio hedge and diversifier, and believe an allocation of around 5% within a USD balanced portfolio is optimal,» wrote Solita Marcelli, chief investment officer for the Americas, at UBS Global Wealth Management in a Monday note.
In late January, Goldman Sachs analysts reiterated their bullish call on the precious metal as the threat of escalating tariffs drives continued demand.
«We see upside risk to our 3,000 [per troy ounce] target from a potentially persistent boost from elevated US policy uncertainty to central bank and investor hedging demand,» wrote the analysts. They added, «We expect modest tactical downside to gold prices if tariff uncertainty fades and positioning normalizes.»
In a Friday note, JPMorgan analysts said in the near-term, gold could fall if stocks sell off. However the threat of tariffs continues to drive prices higher.
«Bearish contagion from equities could weigh on gold in the immediate near-term but disruptive tariffs continue to fuel a medium-term bull case for bullion, skewing risks toward reaching our year-end target of $2,950 per ounce much quicker than currently expected if current tariffs are prolonged,» wrote the analysts.
Gold demand surged to new records in 2024, according to a recent World Gold Council report.
«Central banks continued to hoover up gold at an eye-watering pace» in 2024, with purchases accelerating in the fourth quarter of last year, said the report.
Joe Cavatoni, market strategist at the World Gold Council, told Yahoo Finance that central bank purchases were driven by «concerns about ongoing inflation, geopolitical tensions, and needs to add diversification to their portfolios.»
The Federal Reserve’s rate-cutting cycle, which began last year, has prompted global inflows into physical-backed gold exchange-traded funds (ETFs).
Story Continues
