Amid growing investor concerns over an escalating global trade war, gold prices surged to a fresh record high on Monday (April 1), with spot gold peaking at $3,115 per ounce and year-to-date gains expanding to 18%. This marks the 15th all-time high for gold in 2025, driven by geopolitical risks, a surge in central bank purchases, and new U.S. tariff policies.
Marke safe-haven sentiment spiked after U.S. President Donald Trump signed an order last week imposing a 25% tariff on auto imports. Further intensifying trade tensions, the U.S. is set to implement “reciprocal tariffs” targeting goods from multiple countries this Wednesday. Analysts note that the Federal Reserve trimming its 2024 rate cut expectations from three to two, gold continues to rally on supportive fundamentals.
Leading investment banks have recently upgraded their gold forecasts:
– Morgan Stanley metals and mining strategist Amy Gower highlighted that central bank gold purchases have doubled compared to the previous decade, while retail demand for bars, coins, and ETFs has surged. She predicts gold could climb to $3,300-$3,400 this year if macro conditions improve amid easing high-interest rates.
– Max Layton, Global Head of Citigroup Commodities Research, expects prices to reach $3,200 in the coming months, with a potential rise to $3,500 if U.S. economic growth slows sharply. He cited central bank and ETF demand but emphasized that U.S. trade policy could become a new catalyst.
– Goldman Sachs raised its 2025 base-case forecast from $3,100 to $3,300, warning that under extreme market stress, gold could exceed $4,200 by late 2025 and even $4,500 in 2026.
Despite bullish sentiment, analysts warn of gold’s dampening effect on jewelry demand. Notably, India’s central bank paused purchases in December and February, signaling caution at current price levels. Gower stressed that sustained gains depend on physical demand and interest rate trends: As long as central bank buying and ETF inflows persist, this bull market has not yet peaked.
With global trade tensions unresolved, gold’s status as the ultimate safe-haven asset is being repriced. Markets will closely watch the ripple effects of Wednesday’s U.S. tariff measures, which may serve as a key catalyst determining whether gold can breach the $3,300 threshold.
