Category: Commodities

Goldman Sachs has raised its forecast for gold prices to $3,700 an ounce, suggesting that the yellow metal appears increasingly attractive as a hedge against recession amid rising concerns about the US economy and the escalating US-China trade war.

 

Goldman Sachs has elevated its target price for gold to $3,700/oz by the end of 2025.

The investment bank had adjusted its target price for gold to $3,300/oz for the same year. According to Goldman Sachs, gold could reach $4,500/oz by the end of 2025.

The investment bank indicated that it is using gold as a safeguard against the mounting risks of a US recession, highlighting that both physical demand for bullion and exchange-traded funds have seen a recent upsurge

This was during a week when the U.S. engaged in a rapidly escalating trade war with China. In response to Beijing’s strong criticism, the US raised its tariffs on Chinese imports by 145 percent. In turn, China increased its tariffs on American goods to 125 percent.

Although President Donald Trump delayed their implementation by ninety days, he also announced plans for significant “reciprocal” tariffs against major US trading partners.

Nonetheless, Trump imposed a 10% tariff and noted that specific tariffs on pharmaceuticals and electronics would be enacted shortly.

The precious metal hit a record high of $3,245.69/oz, driven by escalating tensions in the US-China trade war. The yellow metal posts a strong interest in physical and ETF markets,  with numerous major central banks, particularly in Asia.