As the precious metal continues to achieve new heights, market observers are becoming more and more bullish about gold. On Friday, gold futures (GC=F) reached $3,114, marking their 17th record high of the year. This comes after Thursday’s record high, which was reached on Thursday. Concerns about the possibility of a trade war have been heightened as a result of President Trump’s declaration of tariffs on automobiles. At the same time, a declining US dollar (DX-Y.NYB) has generated upward pressure on prices.
At the beginning of this week, analysts at Bank of America made a change to their price target for gold. They raised it to $3,500 per ounce over the next 18 months, which is an increase from their previous goal of $3,000. On the basis of the premise that investments will increase by 10% as a result of increased demand from China and central banks, as well as sustained acquisitions of physically backed exchange-traded funds (ETFs), the updated objective has been established. It is possible that the uncertainty that surrounds the trade plans of the Trump administration will continue to exert downward pressure on the USD, which will provide additional support for gold prices in the short run. The analysts expressed their belief that a complete correction of the United States’ dual deficits may potentially be beneficial for gold.
According to analysts, investors have increased their investments in gold as a result of a number of variables, the most significant of which is the economic policy framework that the Trump administration has implemented. The prognosis made by BofA is in line with a similar outlook made by Macquarie Group, which previously calculated that the price of the precious metal will hit $3,500 during the third quarter of this year. As a result of the huge rebound of the precious metal, which has exceeded 15% year-to-date, analysts at JPMorgan have begun to consider the possibility of a price surpassing $4,000.
When compared to the historical average of over 1,700 days for previous $500 increments, the analysts at the company found that the price of the commodity increased from $2,500 to $3,000 in just 210 days. This is a significant acceleration in comparison to the history of the commodity. “Given that each $1,000 increment is achieved in approximately two-thirds less time than its predecessor, and taking into consideration the principle of diminishing returns along with investors’ penchant for round figures, might the $4,000 threshold be imminent?” An intriguing question was posed by analysts at JPMorgan in a client note that was sent out not too long ago.
A fundamental shift in the market for gold has been triggered, according to the analysts, as a result of the immobility of Russian foreign assets in the aftermath of the conflict in Ukraine. The demand for the precious metal skyrocketed to levels that had never been seen before in the previous year, which was driven by a significant increase in the number of acquisitions made by central banks. “As we approach 2025, gold continues to be our leading bullish selection for the third consecutive year,” according to the financial analysts.