Not only holding support above $3,000/ounce, gold is also expected to soon reach $3,100/ounce - a milestone that could be just a small obstacle in this rally. Gold is now on track to end the first quarter of the year with an increase of 18% - the strongest quarter increase since July 1986.
Neils Christensen - an analyst at Kitco News commented: "Last week, I wrote that the gold market seemed a bit exhausted, but the increased investment demand could help prices go up. Maybe I was too cautious in keeping this optimistic view."
According to market analysts, safe-haven demand continues to drive cash flow into gold as US President Donald Trump's import tax policy and the global trade war have caused the stock market to plummet. While gold had its best quarter in 39 years, the S&P 500 lost 5% - the worst quarter since July 2022.
The good news for gold is that there are still many uncertainties and concerns that could push prices higher. Next week, Mr. Trump is expected to apply new tariffs globally, causing increased trade tensions.
Last week, commodity analysts at Bank of America raised their gold price forecast for the next two years, predicting prices will reach 3,500 USD/ounce by 2027. However, with the current increase, Neils Christensen believes that this number seems quite modest.
Not only Bank of America, Goldman Sachs also raised its gold price forecast to $3,300/ounce by the end of this year. French bank Societe Generale (SocGen) even believes that gold could reach this mark by 2025. If geopolitical tensions escalate, SocGen also sees the possibility of gold reaching $4,000/ounce.
A common point in the latest forecasts from major banks is the growing instability of the US economy. Bank of America warns that Mr. Trump's "America First" policy could turn into an "isolated America". This could lead many central banks to increase their gold purchases and reduce their dependence on the US dollar.
Meanwhile, SocGen also expressed doubts about the strength of the US economy. In their multi-asset portfolio strategy, they are reducing their US asset weight and shifting to European stocks. They also reduced their holdings of the USD and increased investment in the Japanese Yen and the euro. Currently, 7% of SocGen's portfolio is still for gold.
"Gold remains a strong growth asset in the context of geopolitical fluctuations under the US administration, causing strong reactionary policies" - Neils Christensen commented.
Not only gold, silver is also attracting attention. Silver prices could end the week above $34/ounce, with many forecasts suggesting that silver could continue to move up to $35/ounce and beyond.
