At a time when global equity markets are facing volatility amid trade tensions and economic uncertainty, gold has been on an upward trajectory, surging to a fresh all-time high.
The precious metal crossed $3,000 on March 14 before settling around $2,994 at press time, marking a significant weekly gain of over 2.76%.
Trade tariffs and inflation fears drive Gold higher
The ongoing trade dispute between the United States and the European Union has intensified, fueling market anxiety.
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After the EU retaliated against U.S. steel and aluminum tariffs by imposing a 50% tax on American whiskey, President Donald Trump threatened to impose a 200% tariff on European wine and spirit imports.
The escalating standoff has raised fears of higher consumer prices and economic instability, prompting investors to flock to gold as a hedge.
Meanwhile, investor sentiment has also been shaped by expectations for Federal Reserve policy.
The central bank is expected to hold interest rates steady at 4.25% to 4.50% in its March 19 meeting, but speculation is growing over a potential rate cut in May, with CME FedWatch data placing the odds at 27%.
Gold’s rally has also extended beyond the commodity itself, lifting gold-related stocks and bullion-backed ETFs. According to the World Gold Council, global physically backed gold ETFs saw significant inflows in February, totaling $9.4 billion, the strongest since March 2022 with analysts anticipating gold-backed ETF investment trusts seeing ample scope for fresh inflows.
Central banks extend Gold buying spree into 2025
Adding to gold’s bullish momentum, central banks reported net gold purchases of 18 tonnes in January 2025, further driving demand.
Uzbekistan led the buying spree, adding 8 tonnes to its gold reserves, bringing total holdings to 391t, which now account for 82% of its total reserves. The People’s Bank of China (PBoC) extended its buying streak for the third consecutive month, acquiring 5t in January, raising its gold reserves to 2,285t, or 6% of total reserves.
Kazakhstan’s National Bank (NBK) also increased its reserves by 4t, pushing total holdings to 288t, representing 55% of its reserves.
Gold’s outlook: What’s next for Gold
Gold’s sustained rally has prompted analysts to raise their price forecasts upward.
According to Macquarie analyst Marcus Garvey, gold’s surge is primarily driven by investors and institutions seeking protection from credit and counterparty risk.
The bank has raised its 2025 peak price forecast from $3,050 to $3,500 per ounce, citing strong consumer demand and room for further inflows into gold-backed ETFs.
Meanwhile, BNP Paribas has increased its year-end gold target to $3,100, attributing the revision to rising geopolitical uncertainty and trade disruptions linked to Trump’s tariff policies.
Similarly, UBS strategist Joni Teves maintains a $3,100 peak forecast for 2025, citing concerns over slower economic growth and persistent inflation as key drivers for gold’s continued rally.
With gold already at record highs, Goldman Sachs analysts see further upside potential, expecting a climb toward $3,100 per ounce by year-end, fueled by economic uncertainty, inflation risks, and central bank demand.
Meanwhile, DeepSeek AI projections reported by Finbold suggest that gold could climb even higher, potentially reaching $3,200 by the end of the year.
Featured image via Shutterstock
