Editor
Gold prices have reached unprecedented record highs this week, with the precious metal’s year-to-date gains exceeding 25%. This gold price surge represents a significant opportunity for investors seeking stability amid growing recession concerns and ongoing trade tensions.
Financial experts from major Wall Street firms remain bullish on the yellow metal despite its impressive run. UBS Global Wealth Management Chief Investment Officer Mark Haefele noted on Thursday, “An adequate allocation of gold has proven a helpful cushion against uncertainty over trade. Despite this strong run, we believe gold can advance further, and our base case is that the price will reach USD 3,500 an ounce this year.”
Gold Price Surge Continues with Limited Pullbacks
Gold settled at $3,341 an ounce on Thursday before the holiday weekend, reflecting an extraordinary 40% increase over the past year. This remarkable gold price surge has been fueled by several factors, including all-time high central bank demand and substantial investor allocation to physical-backed gold exchange-traded funds (ETFs). Additionally, a weakening dollar (DX-Y.NYB) has significantly enhanced demand for the precious metal.
The persistence of the gold price surge has been particularly noteworthy, with the market offering few opportunities for investors waiting for price corrections before entering positions.
Analyzing Recent Market Movements
A brief 5% drop earlier this month was primarily attributed to margin call liquidations following President Trump’s tariff announcement on April 2, which triggered an equities sell-off, according to Goldman Sachs analysts. However, this temporary decline was quickly reversed as buyers returned to the market, pushing prices back to record levels.
Why Analysts Remain Optimistic About the Gold Price Surge
Lina Thomas and her team at Goldman Sachs view the current gold price surge as structurally supported and less vulnerable to sharp near-term liquidation risks. The firm highlighted that the most dramatic upward price movements this month were driven by Asian official sector buyers, particularly the People’s Bank of China.
“Thus, we see current levels as a tactically attractive entry point — despite the recent move — and believe this reinforces upside risk to our $3,700/toz [per troy ounce] year-end forecast,” the Goldman team stated.
Their analysis suggests that if a recession materializes, ETF inflows could accelerate further, potentially pushing gold prices to an astonishing $3,880 per troy ounce by year-end.
Cautionary Perspectives Amid the Gold Price Surge
Despite the overwhelming positive sentiment surrounding the gold price surge, some market observers advise retail investors to exercise patience. Michael Gayed, Lead-Lag Report publisher, shared his cautionary perspective with Yahoo Finance Live on Thursday: “If we are in the early stages of what could be multiple pulses of margin calls, given the volatility that we are seeing in stocks, it is only a matter of time before gold becomes the source of liquidity to cover those margin calls.”
Gayed clarified that while he doesn’t believe gold has entered bear market territory, investors might benefit from tactical timing: “I don’t believe gold has entered a bear market, but if you’re going to be tactical in your time, you might want to wait.”
As economic uncertainties persist and central banks continue accumulating gold reserves, the gold price surge appears poised to maintain its momentum throughout 2025, offering both opportunities and challenges for strategic investors navigating volatile financial markets.
