Gold Prices Rise Amid Investors’ Concerns

Since the beginning of the year, gold prices have experienced a notable surge, capturing the attention of investors and traders worldwide. As of February 2025, gold prices hover around the $2,930 per ounce mark, reflecting an upward trend driven by various economic factors. This increase underscores gold's appeal as a safe haven asset, particularly during times of economic uncertainty and market volatility.

Investors and traders closely monitor gold prices, utilizing real-time data and market analysis to make informed decisions. The spot price of gold, representing its current market value, is a key indicator for these market participants.

As global economic conditions continue to evolve, the role of gold as an investment remains as relevant as ever.

US Tariffs Boost Gold Prices As Demand Soars

Gold's intrinsic value and historical significance may offer some level of protection against inflation and currency devaluation. As the new US President Donald Trump has made it clear that tariffs on imported products coming from various countries such as Mexico, Canada and China will be a part of his economic policy, gold has become a destination for people who want to diversify their portfolios.

As mentioned earlier in the intro of our article, gold prices jumped to a record high in the second week of February. At the time of writing, gold had gained almost 10% year-to-date.

Tariffs on Canada and Mexico have been delayed by a month, but 10% tariffs on China went ahead. Beijing retaliated immediately by imposing a range of tariffs on US products.

Despite the US coming to a deal with Canada and Mexico, the uncertainty over trade and tariffs could continue to buoy gold prices. If trade tensions intensify and we see more retaliatory measures, demand for gold could continue.

US President Donald Trump's latest comments regarding Middle East geopolitical tensions have added to this uncertainty, further boosting gold prices.

OCBC Says Central Banks Increase Gold Purchases

Economists at OCBC noted in a report that the Fed’s head, Jerome Powell, implied that the central bank would not scramble to lower borrowing costs based on the current economic data. They mentioned: “In a semi-annual testimony to Senate Banking panel overnight, Powell signaled no rush to cut rates. This implies that high for longer may remain and results in higher opportunity cost associated with holding gold. This comes in timely to keep gold’s recent rise in check for now." 

The OCBC report also suggested that central banks have increased their gold purchases which along with rhetoric against the US dollar move the precious metals market. Economists at the Singaporean bank said that "potential ballooning in US debt may bring back de-dollarisation narrative, adding to demand for gold. Moreover, continued gold purchases by central banks is also another driver supportive of gold prices. Most central banks are still easing monetary policy, albeit at a slower pace. This remains marginally supportive of gold prices overall."

ING Says $3,000 Per Ounce In Sight For Gold

ING economists said in a report to investors that the $3,000 per ounce level could be within reach  as gold prices have risen considerably since the start of 2025. As other market analysts, they do mention uncertainty deriving from Donald Trump’s protectionism decisions adding that Fed interest rate cuts during the year could boost gold prices."

The Dutch bank’s analysts noted: “If the central bank is forced to maintain higher rates for longer, this could undermine gold’s appeal. However, the central bank will still ease its policy over the course of the year, even if its path to easing is slower than previously expected.

In their survey, released on February 6th, they also unveiled their forecasts regarding gold’s value: “We believe gold will hit more record highs this year, with $3,000/z now in sight. The macro backdrop will remain favourable for gold as interest rates decline and foreign reserve diversification continues amid geopolitical tensions. A stronger USD and tighter monetary policy could eventually provide some headwinds to gold. However, increased trade friction could add to gold’s haven appeal. We see gold averaging $2,800/oz in the first quarter with prices likely to reach the $3,000/oz level this quarter. We see an average of $2,760/oz in 2025.”

Goldman Sachs Says $3,000 Level Possible In 2026

Goldman Sachs (GS) economists noted the impact of US tariffs and potential trade wars between the US and its counterparts across the world on the price of gold. GS analysts said that “we reiterate that long gold remains our highest conviction trading recommendation across commodities, driven by structural (Central Bank buying) and cyclical (ETF buying) factors,” adding that gold could reach the $3,000 mark in the second quarter of 2026.

In their note to investors, GS economists suggested that “elevated US policy uncertainty reinforces the diversifying role of commodities in investment portfolios. In particular, we continue to see value in long gold ... as a hedge against several tail risks. A scenario of tariff escalation would further support active investor positioning in gold, adding to the base case support to prices we already expect.”

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.