Gold prices took a breather on Tuesday, but analysts see more upside for the precious metal amid recent tariff announcements and the threat of an escalating trade war. The recent jump in gold futures to an all-time high past $2,960 was triggered by President Donald Trump’s tariff plan against steel and aluminum imports.
Despite the pullback, Wall Street analysts remain bullish on gold due to its role as a portfolio hedge and diversifier. Solita Marcelli, chief investment officer at UBS Global Wealth Management, says gold will continue to be supported amid fragile risk sentiment and strong demand. She raised her gold forecast to $3,000/oz for 2025.
The European Union’s vow to react with its own countermeasures has fueled concerns of a trade war, while investors await the president’s retaliatory tariff plan against countries that impose levies on US goods.
Investors will look toward Wednesday’s monthly Consumer Price Index (CPI) print for clues on how the Federal Reserve will proceed with rate cuts. Analysts warn that gold’s recent run creates risk of setbacks if tariff threats don’t materialize.
Central bank buying and ETF inflows have fueled gold’s meteoric rise over the past year, which saw demand surge to new records in 2024. China recently approved 10 insurance firms to buy gold as part of a pilot program, further fueling potential for inflows into the market.
Analysts see China’s green light for insurers as a significant boost to demand, with Nigel Green, CEO of deVere Group, stating that it “will supercharge demand.” With fragile risk sentiment and strong demand continuing to support gold, analysts expect the precious metal to continue its upward trajectory.
Source: https://finance.yahoo.com/news/gold-surges-10-year-to-date-as-tariff-threats-drive-up-demand-171114581.html