Gold futures (GC=F) rose to a fresh record on Friday as tariff threats sparked fears of an escalating trade war.
Futures surpassed $3,110 ahead of the Trump administration’s reciprocal tariffs, expected to be announced next week as 25% levies are put on foreign autos. A weaker US dollar (DX-Y.NYB) has also supported higher gold prices.
The yellow metal is up more than 17% over the past quarter, on pace for its best year-to-date performance in nearly four decades.
As of March 28 at 4:55:55 PM EDT. Market Open.
GC=F HG=F SI=F
Wall Street analysts have been upping their price target on gold in recent days.
Bank of America predicts the precious metal will reach $3,500 per ounce over the coming 18 months under the assumption that investments will increase 10% through more buying from China and central banks, along with investors purchasing physically backed ETFs.
In a note earlier this week, Goldman Sachs analysts said they expect gold to rise, “reflecting upside surprises in ETF inflows and in continued strong central bank gold demand.” The firm has a year-end price target of $3,300 per troy ounce.
Gold inventories in New York skyrocketed this year as institutional investors shipped elevated amounts of physical bars to vaults in Manhattan. Gold inventories for the futures exchange Comex have spiked since November, reaching their highest level since the pandemic in 2021, according to Bloomberg data.
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“What they [institutional investors] started doing in response is stockpiling. … When you have conditions like that, and you throw in some safe-haven demands on top of it, you’re going to see the price of gold start to creep up,” Brett Elliott, director of marketing at American Precious Metals Exchange (APMEX), told Yahoo Finance earlier this month.
The same phenomenon has been happening with copper, which is up 30% year to date as elevated amounts of the metal have been shipped to the US amid fears that it will be hit with Trump’s tariffs.
Earlier this week, copper (HG=F) futures accelerated to a new record in New York following a report that Trump is considering implementing levies on the commodity in a matter of weeks rather than months.
Futures on New York’s Comex hovered around $5.13 per pound on Friday.
“Assuming tariffs are implemented in May, we think shipments to the US will likely be fast tracked,” wrote Goldman Sachs’ Eoin Dinsmore in a note to clients on Wednesday.
Demand from China is expected to keep prices high. Europe’s moves to build up its defense infrastructure are also a tailwind for copper demand.
