Gold is seen topping $3,300-3,400 an ounce before the year-end with the precious metal soaring to new heights almost every day over the past couple of weeks. US-based investment bank Goldman Sachs even sees gold topping $4,500 in an “extreme tail scenario” over the next 12 months. 

Gold has jumped over 3 per cent in the past week as investors are looking for haven assets as US President Donald Trump’s tariff roll-out from Wednesday has raised fears of a global trade war. “Trade tensions (especially tariffs) remain a key driver,” said RBC Capital Markets. 

“The price rise is primarily due to uncertainty over the US tariff policy. The uncertainty around the latest announcements by the US regarding the trade tariffs is pushing up the gold prices,” said Colin Shah, MD of Kama Jewelry. 

The World Gold Council (WGC) said markets focused on trade tensions, as a new 25 per cent US auto import tariff and upcoming retaliatory tariffs weighed on investors’ sentiment.

Uncertain periods

“Stagflation fears abound on higher core PCE (personal consumption expenditures) inflation and lower spending and consumer confidence, pushing stocks down and gold up, as we have seen in the past,” the WGC said.

“Investors across the globe are diverting funds towards haven assets like gold to tide them through these uncertain periods,” said Shah.

On Tuesday, gold futures on the COMEX (Commodity Exchange) were quoted at $3,164.50. an ounce after zooming to an intraday high of $3,177. Spot gold was up at $3,135.32. The precious metal has gained nearly 20 per cent year-to-date.

“The next resistance for gold is $3,210,” said Renisha Chainani, Head-Research at Augmont. 

Amy Gower, head of metals and mining commodity strategy at Morgan Stanley, told Bloomberg Television that gold has not peaked yet, with physical demand from central banks and declining interest rates extending its golden run. 

Record high gold in US warehouses

“This rally continues to have legs. Gold will be relatively more competitive at $3,300-3,400,” she said. 

Goldman Sachs expects that by the year’s end, gold’s price will reach $3,300/oz instead of $3,100 in its earlier forecast. Kamra Jewelry’s Shah said gold could touch $3,250 by the year-end.

In its hypothetical “extreme tail scenario”, Goldman Sachs took into consideration the impact of the US Federal Reserve and its policies boosting demand for gold. It said under such “unlikely” conditions, gold could soar over $4,200 an ounce by the end of 2025. It could vault even higher in 2026 with $4,500 being a possible target. 

Latest COMEX data show that gold stored in US warehouses is at a record high of 43.3 million ounces valued at $135 billion at current prices, compared with 17.1 million ounces in November when Trump won the presidential elections. 

Reuters reported that between December and March, 25.4 million ounces of gold worth $79 billion were delivered to Comex as the risk of US import tariffs widened the premium between Comex futures and London spot prices.

Driven less by economic data

HSBC said there were multiple paths for gold to strengthen amid a US-driven market correction, citing economic concerns and policy risks as key drivers.

The bank sees three scenarios - US recession fears, stagflation concerns and US debt concerns - that could benefit gold. 

RBC Capital Markets, however, said gold’s rally is being driven less by hard economic data and more by the jittery mood of the market. Though it upgraded its gold price forecast, it said soft data such as falling business confidence would have to harden into weaker employment, output and investment numbers.

It said flows into gold-exchange-traded funds were rising again but many investors are hesitant to buy the yellow metal at record high prices.