Gold prices continue their upward trajectory, prompting Wall Street analysts to revise their already optimistic forecasts for the precious metal.
On Friday, gold futures (GC=F) surged to $3,114 per ounce, marking the 17th record high of the year. The rally was fueled by renewed trade tensions following President Trump’s announcement of auto tariffs, coupled with a weakening U.S. dollar (DX-Y.NYB), which further supported gold prices.
Earlier this week, Bank of America raised its gold price target to $3,500 per ounce over the next 18 months, up from its previous projection of $3,000. The revision is based on expectations of a 10% increase in investment demand, driven by heightened purchasing activity from China, central banks, and physically backed exchange-traded funds (ETFs).
“Uncertainty surrounding U.S. trade policies under the Trump administration may continue to weaken the dollar, providing near-term support for gold prices. Additionally, a broader rebalancing of the United States’ twin deficits could further contribute to a bullish outlook for gold,” Bank of America analysts noted.
This latest forecast aligns with a similar outlook from Macquarie Group, which recently projected that gold prices could reach $3,500 per ounce by the third quarter of this year.
Gold’s impressive rally—up more than 17% year-to-date—has even led JPMorgan analysts to consider the possibility of the metal reaching $4,000 per ounce. The firm highlighted the accelerated pace of price increases, noting that gold’s climb from $2,500 to $3,000 occurred in just 210 days, significantly faster than previous $500 increments, which historically took over 1,700 days on average.
“With each $1,000 milestone taking roughly two-thirds less time than the previous one, and considering both the law of diminishing returns and investors’ preference for round numbers, could the $4,000 mark be within reach?” JPMorgan analysts speculated in a recent client note.
Additionally, the freezing of Russian foreign assets following the Ukraine conflict has contributed to a structural shift in gold demand. Central bank purchases hit an all-time high last year, further reinforcing the metal’s appeal as a safe-haven asset.
“As we move into 2025, gold remains our top bullish pick for the third consecutive year,” JPMorgan analysts concluded.
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