Gold price forecasts reach up to $3,500 amid record rally due to US-China trade war

12/04/2025 02:06 AST

UBS and Commerzbank raised their gold price forecasts on Friday, joining other investment banks as investors drive the safe-haven metal to record highs amid the economic uncertainty sparked by US President Donald Trump's trade policies.

Trump's tariffs have roiled financial markets, stoking fears of inflation and a global recession. While he has paused most duties, he has hiked those on China to 145%, prompting Beijing to lift its tariffs on US goods to 125%.

Gold prices breached $3,200 an ounce for the first time on Friday. Prices are up more than 22% so far this year.

Spot gold was up 1.4% to $3,217.15 an ounce at 12.11GMT, after hitting a record high of $3,237.56 earlier in the session. Bullion is up nearly 6% so far this week.

US gold futures climbed 1.8% to $3,234.90.

"We expect gold's rally to extend into next year and for prices to stabilise at higher levels further out," UBS analysts said in a note, forecasting prices will hit $3,500/oz this year.

Commerzbank also raised its gold price forecast for the end of this year to $3,000, from $2,850, noting that assets under management in gold exchange-traded funds were a record $345.5 billion at the end of March.

Central bank gold buying has also been a factor in the price surge this year.

Top gold consumer China's gold reserves stood at 73.7 million fine troy ounces at the end of March, up from 73.61 million ounces at the end of February, as the central bank bought the precious metal for a fifth straight month.

Earlier this week, Deutsche Bank raised its average gold price forecasts for 2025 and 2026 to $3,139 and $3,700 per ounce respectively.

Reuters