Trade tensions, recession fears may push gold prices up by 38 pc this year: Report

Citing the intensifying US-China trade war and growing fears of a global recession, Goldman Sachs said in a note that in a high-risk scenario, gold prices may climb to $4,500 per ounce by the end of 2025.

Under normal conditions, the financial firm expects gold to reach $3,700 per ounce by the end of 2025.

This is the third time Goldman Sachs has raised its year-end 2025 gold target. Earlier, it had revised the target upwards to $3,300 per ounce.

The foreign investment bank said that heightened concerns over the US economy, triggered by the escalating trade war with China, have increased demand for gold as a safe-haven asset.

Gold prices jumped 6.5 per cent last week -- marking their best weekly performance since the COVID-19 pandemic.

Analysts attribute this sharp rise to growing global instability following President Donald Trump’s reciprocal tariffs, which have added to market volatility and pushed investors toward gold.

Market experts note that fears of a recession, rising bond yields, and financial instability are prompting investors to seek refuge in gold.

Not only individual investors but also institutions and central banks are increasing their gold purchases, providing strong support to prices.

The sharp rise in gold prices comes as traditional safe-haven assets like US stocks and Treasury bonds are experiencing a sell-off.

The first quarter of this year witnessed the highest investment in gold-based exchange-traded funds (ETFs) since 2020.

Central banks, especially in emerging markets, are buying gold in large quantities to reduce their reliance on the dollar.

As doubts over Trump’s aggressive trade policies continue to grow, experts believe investors will likely keep pouring money into gold in the months ahead.