Gold prices have surged to new heights in recent days but momentum is waning. A leading research firm, Metals Focus, warns that investors may need to be patient in reaching their $3,000 target due to rising uncertainty.
The analyst expects gold to hit $3,000 an ounce by the second quarter of this year, but notes risks of profit-taking in the short term. The Federal Reserve’s monetary policy stance remains a significant headwind for gold, with markets expecting no rate cut before its July meeting.
However, Metals Focus suggests that US monetary policy and the strong US dollar have become less influential factors in gold prices. Instead, physical demand is driving the market, as investors hedge against potential tariffs and create liquidity issues in London’s OTC markets.
While geopolitical uncertainty continues to support gold, the analysts warn of growing risks in a more nuanced marketplace. The US jewelry market, which accounts for 3% of global demand, shows signs of weakness due to structural decline and rising prices, with total demand expected to fall by 13% compared to last year’s peak.
Source: https://www.kitco.com/news/article/2025-02-20/golds-path-3000-faces-fresh-obstacles-us-market-metals-focus